Jamaica Gleaner / Co-executive director of the Caribbean Policy Research Institute (CaPRI) and economist, Dr Damien King, said the 2017-2018 Budget is fiscally responsible.
He argued that the new Budget is continuing the trend in recent times of being very close to a balanced Budget and meeting the primary surplus target of seven per cent of gross domestic product (GDP).
Speaking yesterday at a press conference hosted by CaPRI at The Courtleigh Hotel in New Kingston, King argued that over the last five years, there has been a steady and significant decline in the country’s debt, with the amount projected to be 116 per cent of GDP at the end of the 2016-2017 fiscal year.
In 2012, Jamaica’s debt was the equivalent of 147 per cent of GDP, which is the total value of all goods and services produced during the year.
Explaining what 147 per cent of GDP meant five years ago, King said for the country to pay off its debt, “everybody would have to show up for work, produce every single day for one and a half years and take no salary, eat no food, live nowhere – the entire value of production for 18 months would have to be devoted to paying off the debt.”
He reasoned, “If we took the 37 per cent of revenue that was devoted to interest payments five years ago; if we were in that same situation now and having to devote 37 per cent of revenue to pay interest, the debt would be costing us $53 billion more than we are paying this year.”
The implication of this, according to King, is that the country would this year have faced a tax package of $68 billion instead of the $17.5 billion in new taxes.