Jamaica pleased with economic progress

The Jamaica government has paid more than J$50 billion in debt to its creditors last month as the country’s financing is improving, Prime Minister Andrew Holness announced Wednesday.

J$58 million in debt repaid

Speaking at a quarterly news conference, Holness confirmed that the Ministry of Finance “repaid J$58 billion in debt last month.

That’s not what we are celebrating. What we are celebrating is that for the first time in a long time we only needed to borrow back J$10 billion. So the nature of government’s debt diet is changing,” Holness said.

He said that the government financing is improving and “would continue at this trajectory where we are repaying more of our debt than we need to borrow.”

He predicted that Jamaica would hit the 60 per cent debt to gross domestic product (GDP) ratio “probably sooner than later, but we certainly will meet that target by fiscal year 2025-2026.”

“Whole different ball game”

Holness described the situation “as a whole different ball game of public finances” saying he doesn’t “think the average Jamaican can truly appreciate that because we haven’t been at that level in decades.

“But the options for government for financing public infrastructure or spending on social safety net or improving social services, all of that is just a new dynamic,” he added.

Impact of devaluations

In recent days the Jamaica dollar has devalued significantly against the United States currency and Holness told reporters he was made fully aware of the situation by the emails sent to him as well as the number of newspaper articles on the topic. “I can well understand it because from a psychological perspective….the country has long valued its progress, valued itself in US dollars and when there is a devaluation the response is always one of fear, sometimes panic.

“It is quite understandable, but I think it behoves me to say to the nation that we are in a new era. We are in a new economic dispensation and the transition to that economic dispensation will have these kinds of what I will describe as growing pains.”

Prime Minister Holness said a review of previous instances of the depreciation of the local currency “you would see that they have come against the backdrop of very poor fundamentals of the economy.