Financial Secretary admits debt dilemma

Financial Secretary Dr. Wesley Hughes has become the first government official to publicly admit Jamaica came close to defaulting on paying its debt.

The Financial Secretary says it was the Jamaica Debt Exchange, JDX, which saved the nation from a potentially embarrassing default that would have blemished an otherwise stellar debt repayment character. 

Speaking at Wednesday evening's FSC forum on the JDX, the Financial Secretary outlined just what Jamaica faced if there was no debt restructuring.

“The strong possibility of default and increased economic uncertainty with the spillover effect on other markets including the foreign exchange market, further draconian tax measures, severe cuts in the public sector and the increased risk of social unrest and greater instability,” Dr. Hughes said.  

He said they were not just rumours, but the reality that Jamaica faced.

The Financial Secretary added that with the debt restructuring successfully reducing payment obligations on the national debt, market players want to see a serious programme to get economic growth going again.

He said part of getting that done is further reducing the national debt which is now 29% higher than the value of the nation's total annual output.

Jamaica is on a trajectory to reduce the debt to equalling total national output in six years but the Financial Secretary says he wants the achievement to come sooner.    

“The fiscal responsibility legislation, namely the Fiscal Audit and Administration Act, has set 2016 as the date that we expect to see a debt to GDP ratio of less than 100%. My view is that we have to work harder than that,” he said.