Budget Watch: Jamaica on Track to Attain Lowest Debt Levels in 50 Years

  • Over the next two years, Jamaica is likely to attain debt levels lower than at any time in the last 50 years, says Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke. The Minister was closing the 2023/24 Budget Debate in the House of Representatives on Tuesday (March 21). “We have to keep on the trajectory to get there, but if we keep on it, we are likely to get to a point where debt levels are lower than any point in the last 50 years,” Dr. Clarke said.
  • The Minister noted that the 30-year journey of the Financial Sector Adjustment Company (FINSAC) and the longer arc of high debt over a 50-year period have taught the country a lesson that “it is easy to put debt on and very hard to take it off,” adding that a “single policy can add mountains of debt”.
  • “What that does is strangle the chances of generations, as servicing interest on top of interest over half a century has robbed generations of opportunities for a better life. And high debt has made economic crises worse, economic shocks more severe, and has reduced the fiscal space and flexibility needed to respond to economic shocks,” Dr. Clarke stated.
  • The Minister noted that this had forced Jamaica into lengthy decades-long periods of economic recovery that have impeded the country’s social, economic and national development.
  • FINSAC, is an entity that was established by the Jamaican government to address the financial sector crisis in the 1990s.
  • Jamaica’s debt-to-GDP is anticipated to end FY 2022/23 at 79.7% and fall further to 74.2% in FY2023/24. This paves the way to achieve the debt target of 60% of GDP by end-FY 2027/28.

(Sources: JIS News and Ministry of Finance)