DESPITE CONTINUING nervousness among consumers and businesses, the Government yesterday painted a picture of a recovering economy, projected to show growth of three per cent in the first quarter of the financial year.
Finance and Planning Minister, Dr. Omar Davies, yesterday updated Cabinet about the performance of the economy for April to June and reportedly told his colleagues that the Government had bettered its revenue and expenditure targets by some $5.8 billion over the three months.
Addressing journalists at a post-Cabinet press briefing at Jamaica House, Minister of Information, Senator Burchell Whiteman, disclosed that total revenue for the period was $1.3 billion above the projected target while expenditure was $4.5 billion below the budgeted amount.
"The reality is that for the first quarter, with all the difficulties of settling the budget and the unexpected devaluation, the economy managed to grow and the fiscal out-turn is better than we expected," Senator Whiteman said.
He explained that the increased revenue resulted from greater inflow of taxes, primarily the four per cent cess which was initially slapped on imports coming into the island. The cess was subsequently abandoned in favour of a two per cent import fee, after it faced resistance from local businesses.
MANAGED TO SAVE HEAVILY
Senator Whiteman added that the Government managed to save heavily on its capital and recurrent spending because of tight management and controls within the public sector.
"There was a pulling back on some capital projects and there was very careful management of the recurrent expenditure... the Ministry of Finance did not give precise details as to how they managed it but they managed," he said.
The data released by the Government came after months of turmoil in the economy, following the presentation of the Budget in April. During his presentation, Dr. Davies announced a massive tax package aimed at raking in $13.8 billion in additional revenues to help finance the $260 billion budget. Critical to the tax plan was the widening of the 15 per cent General Consumption Tax (GCT) net to several items that were previously exempt.
