The government in agreement with the International Monetary Fund, IMF, has reduced the Primary Surplus target from 7 percent to 6.5 percent.
Finance Minister, Dr. Nigel Clarke, says the measure has helped facilitate the government’s ambitious tax cuts for fiscal year 2019/2020.
Dr. Clarke was speaking in the House of Representatives yesterday, where he opened the budget debate for the upcoming fiscal year.
The Primary Surplus is the amount used by the government to service the country’s debt. The Finance Minister says the reduction freed up approximately $10-billion in fiscal space.
The target which started at 7.5 per cent when the country began its economic reform programme with the IMF was last adjusted in 2016.
Dr. Clarke says the IMF agreed that Jamaica’s tax performance has warranted adjusting the primary surplus, while still allowing the government to meet its debt reduction targets by the year 2026.