Apr 2009 Financial News

Economic situation to deteriorate - Shaw

Apr 24, 2009

THE ECONOMY shrank by 0.6 per cent in the last fiscal year and projections for the current fiscal year are that the situation will deteriorate further.

Minister of Finance and the Public Service, Audley Shaw, in his opening contribution to the 2009-2010 Budget Debate, said yester-day that real gross domestic product (GDP) growth for this fiscal year was forecasted at between negative 2.5 and 3.5 per cent.

"Our assumptions are conservative and more pessimistic than the international consensus," Shaw told his colleagues.

He blamed the reduction in GDP growth in the last fiscal year to a downturn in the global economy and "weather related shocks".

A number of sectors such as agriculture, forestry and fishing, manufacturing, construction, transport, storage and communica-tion contracted for the period reviewed.

For the financial year ended March 31, 2009, the value of the Jamaican dollar dipped by 20 per cent over the previous year. The dollar is now trading at approximately J$89 to US$1.

The inflation target for the new financial year has been set between 11 per cent and 14 per cent. Govern-ment missed its inflation target for the 2008-2009 fiscal year. The out-turn was 12.4 per cent for the period, at least 2.5 per cent higher than the nine to 10 per cent figure that was projected.

Billions to borrow

Turning to the Government's debt management strategy, the finance and public service minister said the administration would intensify its engagement with multilaterals.

This fiscal year the Government intends to borrow a total of $215.8 billion, comprising $29.4 billion from the external market and $186 billion to be raised on the domestic market.


Source:
Jamaica Gleaner
Friday April 24, 2009

http://www.jamaica-gleaner.com/gleaner/20090424/lead/lead2.html