Jamaica
News - Real Estate - Economy (January
5, 2005)
PSOJ sees economic progress ahead in outlook for 2005
THE Private Sector Organisations of Jamaica
(PSOJ), a grouping of businesses, banks and retailers, is full of optimism for
growth in the economy, fuelled, it said, by the improved outlook for Jamaica by
country-watcher Standard & Poor's (S&P).
The international agency last month revised
Jamaica's outlook from negative to stable.
In a New Year's message, issued Monday, the PSOJ
also pointed to declining interest rates - which lowers the cost of borrowing -
the successful issue of a eurobond to plug budgetary financing gaps, and
improved indicators such as the Net International Reserves, as underlying
reasons for its own confident outlook.
The NIR was back to US$1.8 billion, levels
last recorded in 2002, while interest rates were cut to between 13.8 and 15.5
per cent, following a 15 to 50 basis point cut in open market rates by the Bank
of Jamaica.
The trade association now says its members are
prepared to make a success of the dragging Partners for Progress talks, an
initiative to cement a partnership with government on governance issues and
fiscal management, and hopefully, influence growth in the economy.
Despite higher oil prices and rising food
costs that have had a negative impact on inflation - at 12.3 per cent in
November - the PSOJ says if fiscal targets continue to be met, Jamaica could, in
2005, see a further upgrade of its credit rating or, at minimum, the country's
outlook could be revised to positive.
The fiscal accounts are $614 million off target
at $27.2 billion in November. Government has targeted a fiscal year-end deficit
of $22 billion in the lead-up to a balanced budget in 2005/06.
S&P in its analysis had pointed to the
emerging Partnership for Progress as one of the influences for the December
revision of its outlook on Jamaica.
The PSOJ itself now sees the partnership talks as
the bridge to a more productive economy through collaboration.
But, it says, government has to ensure that
jobs emerge.
"The creation of new jobs, as part of the
growth, is critical," said the PSOJ statement, urging government to fuel
entrepreneurial development with appropriate policies and programmes.
In 2004, there were positive indicators of
growth in mining and tourism, and announcements of multi-billion investments
across the two sectors which are expected to generate employment.
The industry outlook for tourism remains
positive, with stopover arrivals expected to surpass last year's record 1.3
million. A kicker for the industry is Caribbean Marketplace, the region's
premier hospitality trade show to be hosted in Montego Bay, January 9-11.
Jamaica last hosted the show 20 years ago.
PSOJ also briefly mentioned education, noting
only that it supported the $521-billion reform plan announced in December and
urged government to explore new areas to finance the plan; and similarly
endorsed the crime-fighting initiative, Operation Kingfish.
The association also called for the findings
of the Matalon-led tax committee to be made public, and reminded government of
its fiscal commitment to balance the budget in the coming fiscal year.
The group also thanked Edward Seaga - who has
resigned, to take up a chair at the University of the West Indies - for his four
decades of service in representational politics, and called for the emerging new
political leaders to close out one era and bring new energy to politics.
As for Caricom and plans for integration,
through the CSME, the PSOJ urged government to disseminate information about the
bloc and its purpose.
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