The Minister’s comment came as he tabled the interim report on the Fiscal Policy Paper for the 2014/15 fiscal year, during the sitting of the House of Representatives on October 14.
The Fiscal Policy Paper provides information on the economic out-turn of the previous financial year; the performance of the first quarter of the financial year; projections to the end of the current financial year; and projections for the succeeding financial year and the medium term.
Dr. Phillips informed that the economy returned to growth during the September 2013 quarter and has remained positive to date. “Our challenge now is to secure higher levels of growth and job creation than currently programmed,” he said.
The Minister also reported that inflation is expected to remain within the band of 7-9 per cent for the 2014/15 and 2015/16 fiscal years, and it is expected to continue to trend downward over the medium term.
He informed that as of September 30, 2014, the Net International Reserves (NIR) stood at US$2.2 billion and has surpassed the target in the Extended Fund Facility (EFF) agreement with the International Monetary Fund (IMF).
With respect to revenues and grants, the out-turn through to the end of July, 2014 was 2.1 per cent below the budgeted position.
“In August there was an improvement in these receipts as the Government received the proceeds of European Union grants, which were originally due in June,” Dr. Phillips said.
He said the Government has noted the shortfall in revenue and in that regard, Tax Administration Jamaica and the Jamaica Customs agency have initiated programmes in order to improve their collections for the rest of the fiscal year.
“Should these compliance measures not compensate for the shortfall in revenue, the necessary expenditure cuts will have to be made to ensure that the economic reform programme remains on track,” Dr. Phillips emphasized.
The Minister said the Government remains committed to meeting the objectives of its economic reform programme, to include “continuing to work in fiscal responsibility, and debt sustainability as means to achieving inclusive sustainable growth.”