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The 2003/04 budget was developed within an environment of heightened speculation about the fiscal operations and the Government's ability to achieve a balanced budget in fiscal year 2005/06. Despite the challenges posed by higher than expected interest rates and greater than anticipated depreciation of the Jamaica dollar in FY 2003/04, the targeted fiscal deficit of 5.0%-6.0% of GDP was achieved.
The Government remains unyielding in its commitment to achieve the programmed medium term fiscal targets of 3.0%-4.0% of GDP in 2004/05 and a balanced budget in 2005/06. The Memorandum of Understanding signed by the Government and the trade unions and the ongoing discussions with non-unionized groups augur well for the attainment of these targets. Achievement of the medium term targets is important for sustained economic growth and improvement in the debt ratios.
The level of scrutiny to which the fiscal accounts have been subjected during the past year is unprecedented. This edition of the Memorandum on the Budget therefore seeks to re-emphasize the importance of achieving the medium term targets as well as revisit the factors that led to the current position.
Consequently, this issue contains an appendix entitled "Factors Influencing the Fiscal Balance." This is included with the hope that the facts contained therein will lead to more informed discussions on the fiscal operations and in particular on the debt.
Shirley Tyndall, O.J.
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