Camilo Thame, Business Reporter

Omar Davies, Minister of Finance, has recorded an overall surplus of $14b in November. - Rudolph Brown/Chief Photographer

Flush with cash from heavy borrowings over eight months to November 30, finance minister Dr. Omar Davies, if he keeps to spending projections, will have no need to tap the capital markets for the remainder of the fiscal year ending March 31.

By Wednesday Business calculations, Davies, at the end of November, had an estimated $25 billion lying in the bank, roughly equivalent to what the finance minister will require to meet domestic debt repayments for the rest of the fiscal year. The overall surplus at November was $14.3 billion.

With a projected surplus of $14.8 billion in March and combined deficits of $6.36 billion for December, January and February, Davies is likely to end the last four months of the fiscal year with a budgetary surplus of $8.5 billion.

Moreover, the finance minister need not be bothered by how he willl meet external debt payments for the rest of the financial year.

When he went to the foreign markets last February, he raised US$250 million, partly, it was assumed, to finance domestic spending.

But Davies never used any of that cash for domestic purposes, channelling it instead to external payments.

"Of interest to note is that neither the U.S. dollar nor the Jamaican dollar equivalent has been touched to date, due to the buoyancy of revenue collection," the minister boasted as he presented his budget last April.

"But while Davies will not have to go back to the financial markets for money, and even with the projected performance between December and March, the government will, at the end of the fiscal year, record a fiscal deficit of around $19.5 billion, about $2 billion better than programmed.

IMPROVED FISCAL DEFICIT

It was not immediately clear, however, whether Davies will be able to meet his target for a fiscal deficit of no more than 2.5 per cent of gross domestic product (GDP), given that real growth in the economy will be below the three to four per cent the minister had estimated.

Davies has already surpassed by $10 billion his 12-month borrowing target of $119.7 billion.

At November 30, he had already tapped $129.5 billion from the capital markets, largely through domestic borrowing (97 per cent).

For the review period, April to November, loans were $37 billion above programme.

Importantly, the higher-than-projected borrowing was $25 billion more than needed to cover the $28 billion deficit racked up over the period and the $76.1 billion in repayment of domestic loans, while the US$250 million can just about pay back the J$16.7 billion in external loans scheduled for repayment over the entire fiscal year.