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Budget challenges predicted - Analysts concerned with oil, food prices and fiscal obligations
published: Saturday | March 15, 2008
Shaw
CABINET YESTERDAY concluded a two-week extensive review of the 2008/2009 Budget.
But even as the executive prepares to unveil its plans for the new fiscal year, at least two financial analysts are raising concerns about the likely impact of spiralling oil and food prices and the public sector wage bill on the Budget.
Cabinet convened a meeting on March 3 to fine-tune the upcoming budget and ended the exercise on March 13.
Financial analyst Ralston Hyman is of the view that the Government is likely to face a major challenge to source funds for this year's budget, which he estimates could reach approximately $480 billion.
He said wages and salaries and debt-service charges could amount to nearly $370 billion.
"So, it is difficult to see how the Government is going to pay those debt-service charges, pay that level of wage increase, carry out the programmes they intended to carry out, such as free health care, constituency-development fund, while maintaining a fiscal deficit of 4.5 per cent of GDP (gross domestic product)."
The Government has sought international financing for the budget, but according to Hyman, the estimates of expenditure may have to be presented before the funding is secured.
Call for credible policies
In addition, he says, the country needs a credible energy and food policy in order to combat the rising inflation levels.
Hyman is also recommending that the Govern-ment place a greater level of priority on the ministries of agriculture and energy in the process.
Meanwhile, economist Errol Gregory says the Government will need to present clear targets in the budget this year to generate confidence among Jamaicans.
Minister of Finance and the Public Service, Audley Shaw, is slated to table the 2008/2009 estimates of expenditure on March 27, when Parliament resumes sitting.
published: Saturday | March 15, 2008
Shaw
CABINET YESTERDAY concluded a two-week extensive review of the 2008/2009 Budget.
But even as the executive prepares to unveil its plans for the new fiscal year, at least two financial analysts are raising concerns about the likely impact of spiralling oil and food prices and the public sector wage bill on the Budget.
Cabinet convened a meeting on March 3 to fine-tune the upcoming budget and ended the exercise on March 13.
Financial analyst Ralston Hyman is of the view that the Government is likely to face a major challenge to source funds for this year's budget, which he estimates could reach approximately $480 billion.
He said wages and salaries and debt-service charges could amount to nearly $370 billion.
"So, it is difficult to see how the Government is going to pay those debt-service charges, pay that level of wage increase, carry out the programmes they intended to carry out, such as free health care, constituency-development fund, while maintaining a fiscal deficit of 4.5 per cent of GDP (gross domestic product)."
The Government has sought international financing for the budget, but according to Hyman, the estimates of expenditure may have to be presented before the funding is secured.
Call for credible policies
In addition, he says, the country needs a credible energy and food policy in order to combat the rising inflation levels.
Hyman is also recommending that the Govern-ment place a greater level of priority on the ministries of agriculture and energy in the process.
Meanwhile, economist Errol Gregory says the Government will need to present clear targets in the budget this year to generate confidence among Jamaicans.
Minister of Finance and the Public Service, Audley Shaw, is slated to table the 2008/2009 estimates of expenditure on March 27, when Parliament resumes sitting.
Budget schedule
Opening of Parliament and tabling of the Estimates -Thursday, March 27
Audley Shaw, minister of finance and the public service, opens Budget Debate - Thursday, April 10.
Opening of Parliament and tabling of the Estimates -Thursday, March 27
Audley Shaw, minister of finance and the public service, opens Budget Debate - Thursday, April 10.
Dr Omar Davies, opposition spokesman on finance - Tuesday, April 15.
Government ministers and opposition spokesman - Wednesday, April 16
Opposition Leader Portia Simpson Miller - Thursday, April 17.
Prime Minister Bruce Golding - Wednesday, April 23.
Audley Shaw closes the debate - Thursday, April 24.
Audley Shaw closes the debate - Thursday, April 24.