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Dr. Damien King
By Halshane Burke
The Caribbean Policy Research Institute (CAPRI) has said there is sufficient resilience built into the 2023/2024 budget.
Dr. Damien King, Executive Director of CAPRI, said the credibility of any budget hinges on whether the numbers are resilient to shocks.
Given Jamaica's vulnerable economy, he noted, abnormal circumstances will affect the forecast and expectations for revenue.
Dr. King said more resilience is factored into this fiscal year's budget than in previous years.
"The Net International Reserves of the fiscal bank now stand at the equivalent of five months’ worth of imports and the norm for what is adequate is actually three months," he pointed out.
Additionally, he said another element of resilience has been built by the Jamaican government taking out catastrophe bonds.
"If a well-defined catastrophe occurs, all of the spending to cover that does not have to come from the Consolidated Fund of the government. We get an insurance payout to cover those, and we have some over US$300 million of those to take us through the hurricane season," he explained.
Dr. King said resilience is also built by lowering public debt.
"If the government already owes a lot of money, it’s capacity to borrow more in an emergency is limited, and with the public debt down to 80 per cent of GDP, that actually has built in the capacity to increase borrowing in an emergency, as occurred during the emergency of the pandemic."
Dr. King was providing an analysis of the Government's Revenue and Expenditure Proposals at a forum organised by CAPRI.
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