“Based on the results [of a review of briefs from the Planning Institute of Jamaica and the finance ministry], which I found to be similar to the ministry's revised forecast for the central government accounts, I validate that the estimated fiscal impact of the eventuality — the COVID-19 pandemic — exceeds the GDP[gross domestic product] threshold of 1.5 per cent,” Monroe Ellis reported.

The auditor general said that in order to validate the estimated fiscal impact in the prescribed manner under the FAA Act, her team had reviewed details provided by the Planning Institute of Jamaica (PIOJ) outlining an amendment to the initial growth projections submitted for inclusion in the 2020/21 fiscal policy paper, as well as a submission from the Ministry of Finance and Public Service on the impact of COVID-19 on the 2020/21 fiscal operations, indicating a need for the suspension of the fiscal rules.

Monroe Ellis said a review of the finance ministry's submission indicated that central government accounts balance would move to a deficit of 2.9 per cent of GDP at end of March 2021, from a surplus of 0.7 per cent outlined in the fiscal policy paper for this financial year.

In order to validate the estimated fiscal impact, the auditor general said auditors also looked at the revised medium-term projections for nominal GDP, exchange rates, and interest rates, along with other macroeconomic indicators to project for central government revenue, expenditure, fiscal balance, and the public debt stock.

In its rationale for the suspension of the fiscal rules, the finance ministry said the unprecedented fiscal burden imposed by the pandemic has “derailed the trajectory to attain the legislated debt to GDP target by financial year 2025/26” and indicates that the Government will need more time to reduce the public debt.

Wakanda News Details

A toast to 62

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