Two financial experts say the government should employ a ‘wait and see’ approach before making a decision to move around funds in reaction to the economic shocks now affecting the world.
Their assessment comes ahead of the opening of the Budget Debates in the House of Representatives this afternoon.
The debate is set to get underway on the heels of a new warning from the International Monetary Fund, IMF, yesterday.
The IMF says the world should brace for significant economic fallout due to the war in Ukraine.
The IMF Managing Director, Kristalina Georgieva says while the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious.
Kedisha Clarke reports.
JMMB Group Sovereign Economist & Member of the Private Sector Economic Policy Committee, Theodore Mitchell is not recommending for the government to set aside a major stimulus package at this time in the budget.
Assistant Manager of Private Equity at Proven Investments, Julian Morrison agrees.
Mr. Morrison explained that there’s no certainty at this time how the sanctions against Russia could affect Jamaica.
This he says is why the government needs to actively monitor the potential risk before making a reactionary move to the economic uncertainties.
Energy and commodity prices-including wheat and other grains-have surged, adding to inflationary pressures from supply chain disruptions and the rebound from the Covid-19 pandemic.
The IMF Managing Director says price shocks will have an impact worldwide, especially on poor households for which food and fuel are a higher proportion of expenses.
The IMF warns this crisis will create complex policy tradeoffs, further complicating the policy landscape as the world economy recovers from the Covid-19 pandemic.
Jamaica has not been immune to these global shocks with gas prices already surging and inflation already well above the expected range at 9-point-7 per cent.
In the meantime, Mr. Mitchell says he’d doesn’t believe the budget is too fiscally conservative.
He’s also describing the estimates for capital expenditure as decent.
Mr. Mitchell’s is reacting to Opposition Leader Mark Golding who on Sunday said the budget was fiscally conservative and not mirroring the price increase in some basic food items that will strain the pockets of many Jamaicans.
Theodore Mitchell, JMMB Group Sovereign Economist & Member of the Private Sector Economic Policy Committee.
