Robert Hart, Parliamentary Reporter
THE GOVERNMENT, while not giving up on the possibility of meeting its goals and balancing the budget by 2006, has conceded that it will not be able to meet inflation targets of under double digits for the fiscal year 2004/2005.
Dr. Omar Davies, minister of finance and planning, confirmed yesterday that government's inflation targets of around nine per cent have been busted after the onslaughts of Hurricane Ivan and the worldwide energy crisis.
"At this point in time, we expect to close the fiscal year with inflation in the range of 10.5 to 11.5 per cent," Dr. Davies said, during the debate on the 2004/2005 supplementary estimates of expenditure in the House of Representatives.
The House yesterday approved the 2004/2005 supplementary estimates which have outlined a $3.4 billion increase in government's budgetary outlay for the current fiscal year.
SUPPLEMENTARY ESTIMATES
After a three-hour sitting of Parliament's Standing Finance Committee yesterday morning, the supplementary estimates were vigorously debated in the House of Representatives in the afternoon.
Dr. Davies painted a positive picture of the economy in the wake of Hurricane Ivan, the erratic movement of oil prices, and the
movement of the U.S. dollar versus other major currencies.
"Despite the damage, the Government of Jamaica will honour all its debt obligations," the Finance Minister stressed, while noting that the current account deficit should be approximately 10 per cent of gross domestic product by fiscal year's end.
According to Dr. Davies, the major sectors that were affected by the hurricane were mining and quarrying, agriculture, electricity and water, transportation, storage and communication and the hotel, restaurants and clubs sub-sector.
However, he suggested that most sectors have quickly got back on track within months of the storm. Hurricane Ivan hit the island on September 10 and 11.
The finance minister also revealed that, at the end of November, the net international reserves (NIR) stood above expectations at US$1.8 billion.
