DaviesFINANCE and Planning Minister, Dr. Omar Davies, has projected a three per cent growth for the economy in fiscal year 2002/03 with a targeted reduction in inflation to between five and six per cent.
He was speaking at a breakfast meeting hosted by the Jamaica Chamber of Commerce (CofC) on Wednesday this week at the Terra Nova Hotel in St. Andrew.
Minister Davies pointed out that the projected growth was a continuation of positive economic growth of 3.4 per cent recorded between January to September last year, while the estimated rate of inflation should be two to three percentage points below the 8.7 per cent inflation recorded at the end of 2001.
In keeping with the Government's policy, the country has experienced single digit inflation rates over the last few years.
Further reductions in interest rates were expected, Minister Davies said. He invited the CofC members to press lending institutions to reduce the rates even further.
The reduction of interest rates by lending institutions requires "pressure" from borrowers, he said. "I think there has to be some pressure from the private sector on these institutions to bring interest rates down."
The country's strong reserve position would also ease pressure on the foreign exchange market, the Minister said. Reserves increased to US$1.8 billion at the end of 2001, the equivalent of 21 weeks of imports. He said this figure should continue to grow, notwithstanding "some heavy debt payments" that are due this fiscal year. "The first private capital market bond that was issued in 1997 becomes due in July, so there is a one-off payment, but as long as the conditions are right we have no difficulties in making them," he stated.
Noting that the Government had secured adequate financing for the Budget, he said inflows were expected from the Inter-American Development Bank (IDB) and the World Bank and additional support from the Caribbean Development Bank. "Macroeconomic stability will continue," he added.
Turning to the services sector, Dr. Davies invited private sector investment in the information technology sector, noting that there were opportunities in terms of job creation and overall economic development. He said that credit was available from the development banks and invited members of the private sector to inform him if they had problems accessing funds.
Demand for bauxite is expected to increase, given the resurgence of the Gramercy plant in Louisiana in the United States. He also said that with weather conditions being fair, there should be growth in agriculture.
There are projections of a decline in visitor arrivals for the winter season, 'owing to the September 11 terrorist attacks in the United States'.
