THE THRONE speech has now been delivered (April 3) and this should provide some clues as to the fiscal burdens that the country will have to cope with, over the next year. It would be more useful however, if and when the Minister of Finance, the Hon. Dr. Omar Davies, delivers the opening revenue projections to meet this year's estimates of expenditure figures, that we try to analyse it by bearing in mind four key areas.
The state of the Fiscal Account: the state of the External Accounts; the Growth Projections or prospects; and the state of the Social (stability) Account.
By this I mean we examine the main issues emanating from these areas. Let u take the Fiscal account first. We normally look to see if there will be a deficit or surplus on this account. Given Jamaica's major fiscal problems, this year we will be examining the fiscal deficit level, both as a percentage of the GDP size, as well as the amounts that we will have to borrow to close the deficit, in fiscal year (FY) 2003. On this account may rest the settling down of the exchange rate to some stable figure, as until this has been settled there will continue to be speculation over the Jamaican dollar true value. It will be quite interesting to see what exchange rate the Jamaican FY 2003 Budget is based off. We should also look at what targets Dr. Davies will set again to bring this deficit into balance.
In the case of the External Accounts, we need to look at the External Debt ratios and size; the servicing costs; the BOP current account state; the Net International Reserves figure (as of March 2003), and trace the decline of this NIR over the last six months; and hopefully try to get some remittance figures, that compare March 2003 with March 2002 (although Jamaican figures tend to be lagging several months behind what is a reasonable length of time to capture new trends). In this case I would be interested in any changes in remittance levels, as to how they are affected by the US vs Iraq war.
Growth projections look at the level of growth in GDP that is projected by the Government and its planners. Failure to achieve the level expected in this area has left the government very sensitive on this rate. It will be interesting to see what sectors did well, what sectors did badly, and what are the likely highly vulnerable sectors, in case of a prolonged mid-East war.
Finally, we need to look at the state of social stability. The inflation and unemployment rates, as far as the official rates will be interesting; any job creation rate; the poverty level percentages in Jamaica; and the key social investment areas.
