Jamaica chooses austerity to pave way for bond and IMF deal - Business - JamaicaObserver.com

Jamaica chooses austerity to pave way for bond and IMF deal - Business - JamaicaObserver.com: "The release on Thursday of Jamaica's estimates of expenditure for the coming fiscal year 2012/2013 reveal that Finance Minister Dr Peter Phillips has taken a decisive step towards a credible fiscal budget for this year. Indeed, he may yet emerge almost Houdini like (after the famous escape artist of the last century) from what had looked to many observers as an almost impossible situation, verging on a fiscal crisis."

This escape from fiscal crisis is not without price. The true level of austerity is shown by a quick look at the recurrent budget. Out of a total budget (including debt repayment) of $612.5 billion, total recurrent spending, meaning programmes, wages and interest, is $375 billion, or a $23 billion (about seven per cent) increase above the final revised estimates for the previous financial year. This increase is misleading however in calculating the tightness of the budget, as just under $16 billion represents an increase in interest costs to $136.5 billion. Of the remaining $7 billion increase in non - interest recurrent spending to $239 billion, just over $2.3 billion reflects an increase in pension costs to just over $24 billion, and just under $4 billion reflects an increase in local government costs to $7.5 billion. The majority of this latter increase reflects a quadrupling of the money spent on fire protection services to just over $3.1 billion.

Read more: http://www.jamaicaobserver.com/business/Jamaica-chooses-austerity-to-pave-way-for-bond-and-IMF-deal_11071665#ixzz1ujjw60hR
'via Blog this'