Opposition Deputy Spokesperson on Finance, Fayval Williams, is demanding the government to use a consistent measure of the country’s debt so Jamaicans can track progress in its reduction.
Ms Williams says since taking office, the PNP administration has used several different methods to measure the country’s debt, leading to considerable confusion.
In a media release this afternoon she notes that depreciation of the local dollar has been causing the debt to rise steadily and results in missed debt projections.
The JLP’s Deputy Spokesperson on Finance says the government should adopt the measure of total debt used by the International Monetary Fund, IMF.
That measure includes the central government debt, Bank of Jamaica debt, the net PetroCaribe debt, as well as external and domestic guaranteed debt.
Currently the government’s measure of debt includes central government debt, Bank of Jamaica debt and external guaranteed debt. It excludes PetroCaribe debt.
This has the effect, she says, of making the country’s debt appear lower than it really is.
And, Ms Williams is accusing the government of missing several debt reduction targets without giving an explanation.
She says in its April 2013 Fiscal Policy Paper, the government projected the country’s debt as a percentage of its GDP – otherwise called the debt to GDP ratio – would reach just under 127 percent at the end of 2013-2014.
That document further projected that the debt to GDP ratio would fall to just under 105 percent by 2016-2017.
But Ms. Williams points out that the two subsequent Fiscal Policy Papers showed significantly different debt projections.
For example, she points to the latest debt projections provided by the government in February this year.
Those figures show the projected debt levels being up to 10 percentage points higher than initially predicted in 2013.
The government is now projecting that instead of reaching nearly 105 percent, the country’s debt to GDP ratio will be more than 115 percent in 2016-2017.
The Opposition Deputy Spokesperson on Finance says one of the main reasons the government’s projected debt to GDP ratio has been climbing instead of falling is due to the impact of devaluation of the Jamaican dollar.
She points out that approximately 61 percent of the country’s debt is now denominated in foreign currency.
Ms. Williams also notes that between the end of March 2014 and the end of December 2014, depreciation of the currency added almost 55 billion dollars to the debt stock.
That amount, she says, could have been spent on health, education and other vital social services.