Supplementary Budget To Be Tabled Soon

  • The government is currently formulating the first 2021/22 supplementary estimates through which it will seek to address critical needs emerging in Jamaica since the approval of this year’s $830.8Bn Budget.. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, has said that these priorities include expenditure pressures brought on by the rise in the intensity of the COVID-19 pandemic. The first supplementary budget is anticipated to be tabled by the end of September 2021. 
  • This first supplementary budget will address crucial financing requirements of the health sector, which are significant, as the government continues its efforts to reduce the health impact of the pandemic on the population. It will also address more targeted support for vulnerable populations, among many other areas of acute expenditure needs at this time. 
  • The decision to formulate the supplementary budget comes against the background of robust revenue outturns recorded for the first four months of the fiscal year, ending July 31. Revenues exceeded budgeted inflows by $17.3Bn. This was among the factors spurring the primary balance surplus above the budgeted $26.4 billion target over the period. 
  • The robust revenue performance reflects the much higher than anticipated GDP growth in the June quarter, which the Planning Institute of Jamaica estimated was 12.9% year over year, as the economy rebounded from its 2020 lows aided by the relaxation of containment measures and recovery in our major trading partners. 
  • However, the Minister pointed out that while the government’s actual spend for the period was $7.3Bn lower than programmed, an underperformance of expenditure at a point in time does not reflect a reliable source of fiscal savings, as the expenditure may simply be delayed”. 
  • If fiscal performance remains inline or above projections, the GOJ could realize a fiscal and primary surplus equivalent or better than the current 0.3% and 5.6% forecasts, respectively. However, tighter COVID-19 restrictions and their adverse impact on business operating hours, corporate profits and hence income tax payments, as well as greater COVID-19 related expenditures are major downside risks to this.

(Source: JIS News & NCBCM Research)