The Termite Effect

[Don1]

Jamaica hits 2 years of decline


Friday, October 09, 2009

Last week, the Statistical Institute of Jamaica (Statin) confirmed that Jamaica experienced seven consecutive quarters of decline, when it announced that the economy declined by 3.8 per cent during the June 2009 quarter, when compared to the corresponding period last year.
With further economic decline expected during the September quarter - three to four per cent by Planning Institute of Jamaica (PIOJ) estimates - Jamaica would have reached eight consecutive quarters, or two year's of decline.

Not all sectors of the economy saw continued downturn during the review period. Agriculture, fishing and forestry grew for the third consecutive quarter and registered 10.3 per cent increase in output, while the electricity and water sector along with transport, storage and communication each saw increases in output equivalent to just over one per cent.

Noteworthy, is that hotels and restaurants registered a 2.1 per cent increase in real output in the June quarter after experiencing three consecutive quarters of decline up to March 2009.

Interestingly, real estate, renting and business activities, which registered marginal increase in the June quarter, has not registered a decline in real output since the June quarter of 2002.

This is the longest period of decline that Jamaica has experienced in recent years and the first time since 2001 that there has been more than two consecutive periods of decline.

Between September 2000 and March 2001, Jamaica had three consecutive quarters of decline.

[Muadib]

Why Bruce nevah use up some of the money saved during the Global expansion of the last 18 years to fund aggressive stimulus packages ?

[Don1]

Why Bruce nevah use up some of the money saved during the Global expansion of the last 18 years to fund aggressive stimulus packages ?

You mean the US$2B in reserves?? That would not be wise.... that was needed in vain attempts to defend the shrinking dollar.

Termites at work o Lord of the Rear. LOL!!

[Muadib]

You mean the US$2B in reserves??

Termites at work Rear Admiral.

NIR ?

LOL !!!

Is savings yuh call dat ?

WOIEEE !!

[Don1]

NIR ?

LOL !!!

Is savings yuh call dat ?

WOIEEE !!

Ah wha den..Spendings??? LOL!!! WOIEEEE !!

[Karl]

You mean the US$2B in reserves?? That would not be wise.... that was needed in vain attempts to defend the shrinking dollar.

Termites at work o Lord of the Rear. LOL!!

btw - What are those reserves now?

[Assasin]

After 18 years the one and only economic achievement by the PNP.


How much is Jamaica's debt again?

[Muadib]

PNP Economics and the NIR

"PREMATURELY ENDING IMF AGREEMENTS

The stability was short-lived until the next disastrous error in 1995, which was the decision not to enter into any further IMF borrowing agreements. In order to end the restrictions of the IMF, the foreign exchange reserves in the bank of Jamaica had to be dramatically increased to satisfy the prudent requirement of holding enough foreign reserves to finance 12 weeks of imports.

This was accomplished by buying, not earning, foreign exchange, at great cost to the national debt. In just one year, between 1993 and 1994 the domestic debt more than doubled from $22 billion to $49 billion largely to finance the increase in the reserves which were boosted by more than US$350 million.

The market, as a result, was flooded with Jamaican dollars, causing another bout of devaluation, hyper-inflation, high interest rates and, of course, debt escalation. This wild spree of excess money in circulation continued through 1994 and into 1995.

After completion of the IMF agreement in April 1995, followed by the stockpiling of foreign exchange by the BoJ, the foreign exchange market went through another traumatic period with the rate of exchange moving from $33 to $40 to US$1 in just seven months between August 1995 and April 1996. The end result was that the inflation rate in 1995 doubled the target set.

The interest rate, which had declined by 10 points in 1994, went in the wrong direction and actually increased by 10 points in 1995, to 50 per cent. The total debt jumped dramatically from $31 billion to $50 billion and the carefully nurtured fiscal surplus of 1994 returned to a deficit position in 1995.

Instead of entering into one more three-year agreement with the IMF, during which the NIR would have increased naturally to the target level required, the premature decision to purchase foreign exchange to increase the NIR created massive liquidity, which had to be mopped up with a considerable increase in debt.

The country paid the price. Once again, another inexcusable blunder pushed the economy out of control."

But the real crime is di fools that jump up and down when dem hear how much money in NIR...

LOL !!

[Don1]

PNP Economics and the NIR

"PREMATURELY ENDING IMF AGREEMENTS

The stability was short-lived until the next disastrous error in 1995, which was the decision not to enter into any further IMF borrowing agreements. In order to end the restrictions of the IMF, the foreign exchange reserves in the bank of Jamaica had to be dramatically increased to satisfy the prudent requirement of holding enough foreign reserves to finance 12 weeks of imports.

This was accomplished by buying, not earning, foreign exchange, at great cost to the national debt. In just one year, between 1993 and 1994 the domestic debt more than doubled from $22 billion to $49 billion largely to finance the increase in the reserves which were boosted by more than US$350 million.

The market, as a result, was flooded with Jamaican dollars, causing another bout of devaluation, hyper-inflation, high interest rates and, of course, debt escalation. This wild spree of excess money in circulation continued through 1994 and into 1995.

After completion of the IMF agreement in April 1995, followed by the stockpiling of foreign exchange by the BoJ, the foreign exchange market went through another traumatic period with the rate of exchange moving from $33 to $40 to US$1 in just seven months between August 1995 and April 1996. The end result was that the inflation rate in 1995 doubled the target set.

The interest rate, which had declined by 10 points in 1994, went in the wrong direction and actually increased by 10 points in 1995, to 50 per cent. The total debt jumped dramatically from $31 billion to $50 billion and the carefully nurtured fiscal surplus of 1994 returned to a deficit position in 1995.

Instead of entering into one more three-year agreement with the IMF, during which the NIR would have increased naturally to the target level required, the premature decision to purchase foreign exchange to increase the NIR created massive liquidity, which had to be mopped up with a considerable increase in debt.

The country paid the price. Once again, another inexcusable blunder pushed the economy out of control."

But the real crime is di fools that jump up and down when dem hear how much money in NIR...

LOL !!

ok Rear Admiral... the NIR are not savings.... it is whatever your economic theory tells you...

We are looking forward to the great levels of savings to be generated by the current set of incompetents in charge.

The old set of nincompoops has shown the way. LOL!!

[Don1]

After 18 years the one and only economic achievement by the PNP.


How much is Jamaica's debt again?

Why do you keep harping on the failures of the past? It's silly, nonsensical and counterproductive. Deal with the present.

Will you join the Rear Admiral in singing the same silly song of the lamented past in 2, 5 or 10 years....say in 2016?? How ridiculous!!

Don't you realize that Jamaica needs to move on...fast? Learn from the failures of the past and come with a better way...that's the challenge.

Instead you lot want to waste time in recriminations...I guess to camouflage and excuse present day non performance.

Unfortunately the JLP seems to have learned little...they continue just more of the same BS.

Jamaica needs a new way...not merely a new tribe in power.

Figure it out.

[Assasin]

You are a real joker. You expected any government to turn around an economy within two years in a global recession that has 60 percent of it budget as debt and high interest rate?

that is not the past, that is the current. Yes there is shortcomings but that is not history it is today. Historian speak of the past to learn for the future, not bury it. You only want to talk about what suits you. Everything that was started under the PNP you are quick to point out though.

You have talk about both the negitive and positive and it must be recorded or it will happen over and over again. I guess the new way is only your way?

I will analyse as I see fit.

[Don1]

You are a real joker. You expected any government to turn around an economy within two years in a global recession that has 60 percent of it budget as debt and high interest rate?

Off track. Point out where I expected such a turnaround.

You cannot...so drop that specious argument.

that is not the past, that is the current. Yes there is shortcomings but that is not history it is today. Historian speak of the past to learn for the future, not bury it. You only want to talk about what suits you. Everything that was started under the PNP you are quick to point out though.

We all speak of what interests us...you are no exception. You speak to defend the administration at every point... that's your prerogative.
It's naive... but you have that right.

As for the PNP... I merely point out that what the current GOJ trumpets as its achievements eg tourism... are actually based on the investments and policies previously undertaken under the prior failed PNP regime...that fact is incontrovertible.

You have talk about both the negitive and positive and it must be recorded or it will happen over and over again. I guess the new way is only your way?

This is confused...I don't quite get this.

Suffice it to say we all think that what we propose is correct.

My main point is that neither party can manage... I don't need 3 or 5 or 10 more years of this administration to see that... the trends are clear.

More failure awaits Jamaica.... that's my concern...not which stupid party is in power.

I leave that nonsense to others....like you for example.

I will analyse as I see fit.

No doubt you will... you'll just continue on the wrong track.

[Muadib]

LOL !!

Yuh wretch yuh..

This time yuh slip trip yuh...

Yuh not fooling nuhbaddy disaffected comrade.. mi keep telling yuh..

Sad sight to see them wondering in the wilderness.. cheer up, there may be hope for returning the party to its Norman Manley roots...

Hang in there.

[Muadib]

Yadda, Yadda, Yadda.

Eddie was thrown out in '89 after turning around the economy.

I am sure there were many at the time that did not see a difference between the Parties.. well the difference was made clear and very quickly...

Some are still blind... I wonder what is blinding them..

LOL !!

[Don1]

LOL !!

Yuh wretch yuh..

This time yuh slip trip yuh...

Yuh not fooling nuhbaddy disaffected comrade.. mi keep telling yuh..

Sad sight to see them wondering in the wilderness.. cheer up, there may be hope for returning the party to its Norman Manley roots...

Hang in there.

Whatever you say Rear Admiral..... tell mi more!!