Evans ECONOMIST, Dr. Omri Evans sees challenging times ahead for Jamaica, as "the Jamaican economy is yet to emerge from an extended period of decline and stagnation."
With tax revenue collections and grants about 10 per cent below projections for the first four months of this financial year, he is predicting that Government is likely to present a Supplementary Budget announcing an increase in GCT from 18 to 20 per cent and additional Stamp Duty on Imports.
However, he feels Government will postpone the effective date until after Local Government Elections. Dr. Evans, who is also General Manager of Fidelity Economics Limited, was speaking at a recent workshop which formed part of a 3-day Strategic Planning Retreat for Board and Committee Members of Churches Co-operative Credit Union, held at the Renaissance Jamaica Grande Hotel, Ocho Rios.
He is of the view that if Jamaica's tourism does not rebound within the next 12 years, Government will have no choice but to re-enter into a borrowing relationship with the IMF.
The economist added that in order to restore balance to the 2001/2002 national Budget and set the framework for the next Budget, Government would be seeking to borrow $12 billion from the domestic market, resulting in interest rates remaining high over the next 18 months. According to Dr. Evans, Government will have to raise capital from the domestic market over the next financial year, because investors in emerging markets had become nervous, given the adverse developments in countries such as Argentina, Brazil and Turkey.
"The PNP promised in its recent Manifesto to reduce the debt to GDP ratio to 100 per cent by 2006, based on a GDP growth rate of between 2 and 4 per cent per annum. But this is going to be a major challenge in light of the fact that the Government's monetary policy of using high interest rate to defend the current at any costs has been and will be the major inhibitor to the achievement of the 2 to 4 per cent GDP growth rate over the next 3 to 4 years," he said.
