Category: Top stories: Local

NEW YORK, USA – Standard and Poor’s (S&P), the international rating agency which on Monday downgraded Jamaica’s credit worthiness, is standing by its assessment in the face of strong opposition by the Jamaican Government.

The Bank of Jamaica weighed in Tuesday on the change in leadership at the central bank but confined its comments to an assurance to the market that investors could expect continuity in its operations, with no reference to policy prescriptions.

Over the last few months, Jamaicans have spent a lot of time debating the causes of our economic problems. In a perverse way, the current crisis reduces the policy options or the degrees of freedom with which we have to operate.

From time to time, I talk to business people in Jamaica who tell me that with each passing day business is getting more and more difficult, as buyers are not only spending less but are taking longer to pay.

Per capita savings have fallen below zero for the first time since 1985, according to data published by the Statistical Institute of Jamaica.

Prime Minister Bruce Golding noted following tabling of the supplementary budget this week that a local businessman had contacted him to express “surprise that the government budget had gone up and not down.”

The Government yesterday signalled that it would be going to the market to plug the $6-billion gap in the Budget. “There is going to have be some increase in borrowing,” Finance Minister Audley Shaw told journalists at yesterday’s post-Cabinet press briefing.

If anyone still harboured any doubt – unlikely as that would be – that this Government, and this country too, are firmly hemmed in between a rock and a hard place, the First Supplementary Estimates tabled Tuesday in Parliament would have soundly dispelled any such notion.