The Ministry of Finance is now confirming the Investor’s Choice forecast that the fiscal year deficit to March 2014 will be effectively wiped out due to the revenue measures put in place earlier in 2013.
The Ministry, in a review of its operations and the economy to October 2013, indicates that the deficit is now “projected at 0.1% of GDP or $1.28 billion, a significant improvement on the 0.5% of GDP budgeted”. The deficit was originally projected at $8.046 billion and would have been down from a deficit in 2013 of $54.6 billion.
The estimated fiscal deficit of 0.1% of GDP is the lowest since Fiscal year 1995/96, when Central government operations generated a fiscal surplus, the ministry in their review states.
The projected improvement will emanate from the reduction in interest costs below the amount originally budgeted.
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The paper went on to state that “In spite of new tax measures that were implemented in 2013, there has been revenue shortfall. In an attempt to partially address the issue the Tax Administration Jamaica (TAJ) and Jamaica Customs Agency (JCA) have stepped up their administrative and operational activities, in an effort to keep collections in line with budget for the remainder of the year. While the actions are anticipated to yield positive results, they are not expected to be sufficient to reverse the revenue shortfall up to the end of October 2013. Within this context, the GOJ identified expenditure restraint measures of 0.5% of GDP, equivalent to $6,944.7mn, which will serve to ensure that the primary surplus remains on track with the programmed 7.5% of GDP target in the EFF. These adjustments will be reflected in Supplementary Estimates to be tabled in Parliament for approval in the final quarter of FY 2013/14.”
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