Tweet
Published: Wednesday | January 7, 2009
The Finance Ministry has fallen $13.8 billion short of income from grants and taxes in the first eight months of the fiscal year, putting greater pressure on Government to carve its spending plans.
The ministry has been delaying spending mainly on capital programmes to deal with the shortfall, but still the deficit has been climbing and for the first time this year has turned out higher than budgeted.
Notwithstanding the near $13 billion of spending chopped from the Budget, the deficit at the end of November reached $43 billion to breach its target of $42 billion in the midst of the economic slide.
Similarly, the primary surplus also fell below target ending November at $369 billion against the projected $38.2 billion.
Decline in agriculture
The Statistical Institute of Jamaica, in a reaffirmation of previous estimates by the Planning Institute of Jamaica, said the economy contracted by 0.3 per cent in the September quarter relative to the similar period in 2007, led by declines in agriculture by 1.0 per cent and an 8.8 per cent drop in construction.
There was growth in the mining/quarrying and manufactured goods, as well as a 0.3 per cent improvement in service GDP, but not enough to grow the economy in the quarter.
The downturn in economic activity is manifested in a contraction in international trade and production/consumption taxes.
Consequently, government revenue and grants for the eight-month period totalled $169 billion against projections of $183 billion.
Tax revenue shortfall
Tax revenue at the end of November came in at $152 billion, approximately $10 billion below the budgeted figure for the period.
General consumption tax recorded the biggest dip - $6.3 billion.
Intake from the bauxite levy, which the Government and firms are now said to be negotiating its suspension as a stimulus to firms to keep them open in the face of a slump in demand for aluminium amounted to $3.8 billion, $1.7 billion below the projected figure of $5.5 billion.
Government's stimulus package is costing some $28 billion, including $862 million of tax revenue which it plans to sacrifice.
Finance Minister Audley Shaw has said a revised Budget should be tabled this month incorporating the stimulus package.
http://www.jamaica-gleaner.com/glean...business4.html
The Finance Ministry has fallen $13.8 billion short of income from grants and taxes in the first eight months of the fiscal year, putting greater pressure on Government to carve its spending plans.
The ministry has been delaying spending mainly on capital programmes to deal with the shortfall, but still the deficit has been climbing and for the first time this year has turned out higher than budgeted.
Notwithstanding the near $13 billion of spending chopped from the Budget, the deficit at the end of November reached $43 billion to breach its target of $42 billion in the midst of the economic slide.
Similarly, the primary surplus also fell below target ending November at $369 billion against the projected $38.2 billion.
Decline in agriculture
The Statistical Institute of Jamaica, in a reaffirmation of previous estimates by the Planning Institute of Jamaica, said the economy contracted by 0.3 per cent in the September quarter relative to the similar period in 2007, led by declines in agriculture by 1.0 per cent and an 8.8 per cent drop in construction.
There was growth in the mining/quarrying and manufactured goods, as well as a 0.3 per cent improvement in service GDP, but not enough to grow the economy in the quarter.
The downturn in economic activity is manifested in a contraction in international trade and production/consumption taxes.
Consequently, government revenue and grants for the eight-month period totalled $169 billion against projections of $183 billion.
Tax revenue shortfall
Tax revenue at the end of November came in at $152 billion, approximately $10 billion below the budgeted figure for the period.
General consumption tax recorded the biggest dip - $6.3 billion.
Intake from the bauxite levy, which the Government and firms are now said to be negotiating its suspension as a stimulus to firms to keep them open in the face of a slump in demand for aluminium amounted to $3.8 billion, $1.7 billion below the projected figure of $5.5 billion.
Government's stimulus package is costing some $28 billion, including $862 million of tax revenue which it plans to sacrifice.
Finance Minister Audley Shaw has said a revised Budget should be tabled this month incorporating the stimulus package.
http://www.jamaica-gleaner.com/glean...business4.html