PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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The GOJ highlighted five strategies that would be the focal point on which a competitive macroeconomic environment would be pursued. These were: application of a strong, disciplined approach to fiscal and debt management reform of the tax system to allow for improved efficiency and the creation of a business friendly environment reduction of bureaucracy achieving higher levels of local and foreign investment above levels that were attained in the past 5–10 years increased energy conservation and development of alternative energy sources. Table 5.4. Jamaica: Medium Term Macro-Economic Targets Unit 2008/09 2009/10 2010/11 Actual Targets* Outcome Real GDP Growth Rates % -1.7 -2.5 0.6 Inflation Annual (point-to-point) % 12.4 13.3 7.3 Balance of Payments Current Account/GDP % -18.0 -9.4 -8.8 Net International Reserves US$ million 1,629 1,751.9 1,424 Gross Reserves US$ million 1,664 2,414.4 2,151 Gross Reserves in weeks of imports weeks 12.8 17.4 14.6 Fiscal Accounts Fiscal Balance % -1.3 -10.9 -6.5 Primary Balance % 4.8 6.5 7.0 Source: Compiled by the PIOJ from data provided by BOJ, STATIN & MOFP. Fiscal Accounts For the period April – November 2010, Central Government operations generated a fiscal deficit of $50,682.7 million, which was $15,199.3 million better than budgeted. The fiscal deficit for the period resulted from Revenue & Grants being $572.3 million higher than expected while spending was $15,199.3 million lower than planned. The higher than programmed Revenue & Grants was due to improved intake from Tax Revenue (up $1,727.5 million) and Non-Tax Revenue (up $618.0 million) which outweighed shortfalls by Bauxite Levy, Capital Revenue and Grants. Central Government spending at $247,605.1 million was 5.8 per cent lower than planned and was due to shortfalls of $10,570.3 million and $4,628.9 million for Capital and Recurrent Expenditure, respectively. The lower than expected outlay for recurrent expenditure was due mainly to the categories Interest and Wages & Salaries being 57
$4,742.0 million and $688.4 million below expectations, respectively. The lower than planned spending on interest reflected the impact of lower than projected interest rates due to the Jamaica Debt Exchange. Inflation For 2010, the point to point inflation rate 14 was 11.7 per cent, 1.5 percentage points greater than the rate recorded for 2009 15 (Table 5). During the year, prices were influenced by both external and domestic forces. Movements in international commodity prices, particularly crude oil and grains, contributed to higher energy, food and transport-related prices. Consequently, the divisions which contributed most to the inflation out-turn for the year were Food & Non- Alcoholic Beverages, Transport, Housing, Water, Electricity, Gas & Other Fuels, which together accounted for approximately 78.0 per cent of overall inflation. Food & Non-Alcoholic Beverages increased by 12.8 per cent, influenced by weather related shocks and upward movement in international grain prices. Consequently, foods such as meat, bread and cereals for which grains are an input recorded increased prices. Additionally, the supply of domestically produced agricultural items was affected by drought conditions earlier in the year and by heavy rains in the latter half. As a result, increases in the prices of Vegetables & Starchy Foods accounted for approximately 40.0 per cent of the movement in food prices. Transport increased by 25.7 per cent. In addition to the effect of crude oil prices, the upward movement of the Transport index was affected by the April 1st increase granted to the JUTC and JUTC franchise operators. Housing, Water, Electricity, Gas & Other Fuels increased by 8.4 per cent. Movements in international commodity prices, particularly crude oil contributed to higher energy costs. The West Texas Intermediate to which local energy prices are linked, increased by approximately 28.8 per cent, translating into higher electricity costs. Higher consumer price indices were reflected in all three regions: Greater Kingston Metropolitan Area (13.6 per cent); Other Urban Centres (12.0 per cent); and Rural Areas (10.3 per cent). 14 This is the percentage change between the monthly index for December 2008 and the monthly index for December 2007. 15 The average annual inflation rate was 12.6 per cent relative to 9.6 per cent for the preceding year. 58
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i A GROWTH-INDUCEMENT STRATEGY FOR
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To the many ordinary Jamaicans who
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Preface The Jamaican economy has ex
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for making a determined start on th
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the private sector groups, listed b
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Citibank N.A. Jamaica Branch Grace
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need for “additional fiscal space
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Chapter 2 ________________ Summary
Page 17 and 18: 1.0 The Economic Situation Today 1.
Page 19 and 20: expected to provide an essential an
Page 21 and 22: Table 2.1. The Policy Framework: A
Page 23 and 24: programme of social inclusion that
Page 25 and 26: Strategic Focus Table 2.2. Growth S
Page 27 and 28: 6.0 Short-Term Growth Stimulus 6.1
Page 29 and 30: decline of 2.0 - 2.2 percentage poi
Page 31 and 32: Table 2A.2. NWA Projects To be Fast
Page 33 and 34: Table 2A.5. Community Renewal Proje
Page 35 and 36: Table 2B.3. Impact of Repairing Far
Page 37 and 38: Appendix 2C Methodology of the Grow
Page 39 and 40: Part I _________ Overview 28
Page 41 and 42: 2.0 Vision 2030 Jamaica Before delv
Page 43 and 44: 3.0 May 2010 Security Event and Aft
Page 45 and 46: the longer than anticipated global
Page 47 and 48: April July October January April Ju
Page 49 and 50: Three industries recorded increases
Page 51 and 52: 9.0 Proposals for Growth-Stimulus I
Page 53 and 54: targeted economic and social infras
Page 55 and 56: partnering with government to disco
Page 57 and 58: 3.0 Growth Inducement Strategy The
Page 59 and 60: Growth-Inducement Strategy Alignmen
Page 61 and 62: 50 Part II _________ Situational An
Page 63 and 64: inadequate provision of public infr
Page 65 and 66: 2.0 Macroeconomic Assessment 2.1 In
Page 67: Increased global oil consumption wa
Page 71 and 72: Non -Traditional Domestic Exports E
Page 73 and 74: negative impact of the Jamaica Debt
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million Figure 5.1. Private Sect
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Page 95 and 96: creates allocative inefficiencies,
Page 97 and 98: Million $ Per cent Jun-10 Mar-10 De
Page 99 and 100: Table 6.1. Employed Labour Force by
Page 101 and 102: J$ million Mar-10 Dec-09 Sep-09 Jun
Page 103 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
Page 105 and 106: 4.10.2. However, the extent of the
Page 107 and 108: Part III ____________ Analytical Fr
Page 109 and 110: functional relationship between the
Page 111 and 112: It follows that: (5) s = I/Y = [S -
Page 113 and 114: However, the existence of measureme
Page 115 and 116: (d) v* = Y*/K* This is a measure of
Page 117 and 118: in Chapter 8. The mutual interactio
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Transforming the complex set of str
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Appendix 7A A Methodological Note T
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Chapter 8 ____________________ Asse
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The DBI focuses more narrowly on qu
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to ask, is it possible to predict g
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can be made to serve a very useful
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For further elaboration of the cons
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progressive Jamaica-based firms and
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Table 8.2. Jamaica: Doing Business,
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Table 8.4. Global Competitiveness I
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Table 8.5 (continued) Rank Indicato
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Rank* Constraint Table 8.7 Business
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Chapter 9 ___________________ Inter
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3.0 The Burdens of LAC’s Logistic
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conditions. These combined with a p
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Figure 9.4. Proportion of Primary A
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6.0 Logistics are Essential for Tou
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7.0 Fundamental Steps Forward for J
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Part IV ________________ Policies a
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Current Status: Cabinet by decision
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e more than compensated for by the
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B ____________________ Eliminating
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Commercial Bank loan rates have als
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5.0 Expected Outcomes These measure
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capital, mainly in the form of equi
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oth local and overseas (including t
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Table C.1. Proposed Implementation
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Locally, the Scientific Research Co
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Develop formal and informal links t
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D ____________________ Business Pro
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5.0 Recommendations Based on the ma
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2.5 Coexistent with the levels of u
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industry as well as provide funding
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Table E.2. Unemployed Labour Force
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indirect losses experienced when th
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Table F.1 (continued) Area Type of
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G ____________________ Community Re
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Figure G.1 Community Renewal Progra
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Table G.1 Priority Initiatives Obje
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Table G.2 Phased Implementation Pla
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H ____________________ Proposed Wes
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3.0 Transparency Guarantees By desi
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and Coordinating Unit (PCMU) was es
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therefore need to have sanctioned o
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Figure I.1. Functions of National P
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The rationalisation was guided by t
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deliver services in an efficient an
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efurbishing to allow for accommodat
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Part V _______________ Panelists’
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With the benefit of hindsight, some
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ight. Where we as a society fail is
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and exclusion of the majority of th
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the elders, youth, children. What f
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C __________________ Enhancing Nati
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Figure C.1. National resilience is
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PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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