Skip to main content

7 Numbers every Jamaican should be concerned about but only a few really are.


The data below serves to highlight some critical numbers concerning the Jamaican economy.

 2.2% - Jamaica's GDP growth rate for 2011

7 - Jamaica's rank on IMF's data of the worlds slowest growing economies.

8.55% - Growth rate of Jamaica's Total Internal Debt for 2011

18.75% - Growth rate of Total Government Guaranteed External Debt between Mar 2010 - Feb 2011

JM$1,226.15 Billion - Jamaica's Gross Domestic Product

JM$1,713.29 Billion  - Total Government Gross Debt

50 - Number of years it took various political leaders to pile this burden and if this is allowed to increase the earlier six numbers will only get worse.

Why these numbers should matter:
  1. More Taxes: Debts must be repaid and the primary means for the government to pay these debts is through taxes. Jamaicans should brace for more and significant tax increases over the next five years  should national debt growth rates continue to out pace GDP growth and government tax inflows growth rates.
  2. Devaluation of the Jamaican dollar: The more debt Jamaica has the less attractive the currency looks especially if NIR is being used to pay debt. The more the dollar devalues the more expensive everything will become and technically leading to increased poverty.
  3. Higher interest rates: If Jamaica is viewed as being less capable of repaying its debts by international rating firms, Jamaica could be down graded. If this happens higher interest rates could follow and as a result to cost of money will go up.   if this happen and history repeats itself Jamaicans may brace for further economic contraction. 
  4. Lack of national financial resources to spend on public sector wages and national infrastructure: if there is no funds to finance public sector wages then one of or two things could happen. Public sector workforce is cut or a salary freeze is imposed for the next 3-5 years.

Possible options (solutions suggestions) for the country:
  • Jamaicans start to consume significantly less imports (food and fuel) and shift much more of our efforts into export of all legal kinds.
  • All public sector workers agree immediately to a sacrifice of a public sector wage freeze for the next two-three years wage freeze without retroactive payment for two years.
  • Debt forgiveness or a partial default on the national debt which is quickly reaching a crescendo at which point the country will default.

Greater belt tightening is a must in the near future if the debt growth rates don't stabilize or begin to fall. Jamaicans can choose  to tighten this belt voluntarily now or be forced to do so in the near future 3-5 years as a consequence of the uncontrolled and unmanageable debt levels.

The question I have to ask myself is, is this real or is this a consequence of an overly worried and misinformed mind?


Comments

  1. O2July 24, 2012 at 7:28 AM

    political leaders need a wage cut to below when they gave themselves an increase. we shouldn't have a big jamaica 50 celebration. Tax heavily imported goods to slow imports of products we produce ourselves.

    ReplyDelete

Post a Comment

Popular posts from this blog

Jamaica - Country at Alarming Economic Risk

Colide Z     Sweet   Music   Jamaica      Tech Life In an earlier blog   "7 numbers every Jamaican should be concerned about"   I highlighted some data and information points about the state of the Jamaican economy . Today I review those figures with some updated information. The situation has not budged   favorably , in fact it has gotten worse and as a result I feel the need to further highlight the facts and figures in an effort and hope to bring further attention to the matter. Hopefully maybe just maybe more Jamaicans will become more aware and sensitive to the present challenges we face and the critical implications for the future of Jamaicans between age groups 25 - 50. Jamaica's Gross Domestic Product - JM$1,226.15 Billion Jamaica's GDP growth rate for 2011  - 2.2% Jamaica's rank on IMF's data of the worlds slowest growing economies - 7 th. Total National Debt at end of 2011 - $1.63 trillion Total Government Gro
Post a Comment
Read more

Stellar Achievements - Jamaica moving Up, Up, Up...

The People's National Party held their 76th Annual Conference over the weekend of September 20-21, 2014 and the following was noted among the achievements: On the macro-economic front. We are experiencing: • The narrowing of fiscal deficit; down from 6.7% of GDP in 2011 to a balanced budget in this financial year. • There is a growing primary surplus; we are comfortably ahead  of the targets. • We are importing less • Tourism arrivals are up by 4%. • International investors are coming to Jamaica because they are confident in our stewardship and in the new Jamaica that is emerging, and • Our recent re-entry into the international bond market was oversubscribed yielding over US$800M. Even more importantly, we got it at the lowest interest rates ever. •   More Jamaicans are in jobs than two years ago; STATIN has reported that 25,700 Jamaicans were employed this year over last year.  Unemployment as a result is declining; and is now 13.6% down for 16.3% last year April. To th
Post a Comment
Read more

Tourism is great and will only get greater - Jamaica's Secret ....

Tourism Opportunities Reiterating, Brand Jamaica is larger than ever and continues to grow. This is in no small part due to the continued exploits of the sports and entertainment talents of Jamaicans. An effect that is then compounded by the diaspora.  The Tourism Industry has been a major beneficiary and will continue to be in the foreseeable future. The industry has been seeing meaningful growth over the last 3 years. It is projected to compound this growth by at least two (2) percent over the next few years. 2014 alone saw an increase in tourist arrivals by 4%.  Jamaica’s True Treasures   continues to be unearthed. Growing Stopover arrivals. Source: Jamaica Tourist Board The data and information below highlights just how big Tourism is and how it has the potential to transform Jamaica and Jamaicans. Approximately 1 Billion individuals (just over 14% of the world's population) traveled to another country year in 2013. Roughly 25.1 million tourists from across t
Post a Comment
Read more