Jamaica News: Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, tabled the First Supplementary Estimates of Expenditure for 2020/2021, in the House of Representatives, on May 13.
The figures show that the Budget for the 2020/21 fiscal year has been revised to $838.15 billion, down from $853.46 billion.
The Recurrent (Housekeeping) budget has been increased from $779 billion to $792 billion, while the Capital (Development) expenditure has been reduced from $74 billion to $46 billion.
In his address, the Minister pointed out that the reduction would result from the impact of the coronavirus (COVID-19) pandemic, which is expected to result in a contraction of the economy.
“We will have a reprioritising of expenditure, and $50 billion worth of expenditure will either be replaced by new expenditure or, in some cases, would be cut,” he explained.
The Finance Minister said that as a result of the pandemic’s direct impact, the Government is faced with new expenditure and fewer revenues.
“In the context of the COVID pandemic, the Supplementary Estimates for the 12 months, over which we expect different situations to evolve, we expect revenue and grant flows to be $81 billion or 12.3 per cent lower than the approved Estimates. The reduction is mainly from tax revenues, which we expect to decline by 13.4 per cent,” the Minister indicated.
In addition to the expected decline in revenues, there is also a $34-billion increase in new expenditure, coupled with a reduction in other inflows of $5 billion.
Dr. Clarke further said that with a forecast of a gross domestic product (GDP) out-turn of -5.1 per cent for the 2020/21 fiscal year, “this growth outcome will naturally have an impact on the revenues that are used to finance government expenditure”.
He explained that in order to facilitate the financing of this revised Budget, the primary surplus balance will be lowered to 3.5 per cent of GDP for financial year 2020/2021, down from 5.4 per cent.
Dr. Clarke informed that the Public Administration and Appropriations Committee (PAAC) of the House of Representatives will meet next Wednesday (May 20) to deliberate on the First Supplementary Estimates.
Source: JIS News