THE group of government-owned self-financing public bodies (SFPBs) recorded an overall balance surplus of $9,974 billion (budgeted surplus: $1,498.8 billion) during the first quarter of financial year 2018/19.

Contributing to this outturn was an improvement of $8,876 billion in the group’s operating balance, and an overall reduction of $2.6 billion on capital expenditure.

However, Minister of Finance and the Public Service, Dr Nigel Clarke, informed the House of Representatives, during the recent debate on the supplementary estimates, that an increased build-up of $3.5 billion in inventories served to partially offset the impact of the improved operating balance and lower capital expenditure.

According to Dr Clarke, the improved operating balance was primarily attributed to Petrojam Ltd, the National Insurance Fund (NIF), Port Authority of Jamaica (PAJ) and the Airports Authority of Jamaica (AAJ).

Petrojam, PAJ, NWC and AAJ also contributed to the reduced capital expenditure, he said. But, the underspend was partially offset by the National Housing Trust, which exceeded its budgeted expenditure by $3.4 billion.

A number of projects that were delayed in the last quarter of financial year 2017/18, but were brought forward to 2018/19. Additionally, there were increased disbursements consistent with Government’s policy to make housing more accessible.

Turning to the outlook for 2018/19, Dr Clarke said that the SFPBs are currently programmed to generate an overall balance deficit of $10.4 billion for 2018/19. However, proposed adjustments indicate a probable deficit of $19.7 billion. The main contributors to the increased deficit are expected to be the PetroCaribe Development Fund (PDF), due to the additional special financial distribution of approximately US$55 million, and the NHT which is expected to incur higher than originally programmed capital expenditure.

Turning to financial year 2019/20 and the medium term, Clarke said that consequent on the adjustments proposed for 2018/19, the Central Government profile for 2019/20 and the medium term outlined in the 2018/19 Fiscal Policy Paper have been updated.

“The main factors incorporated into 2018/19 are payments to JPS for street lighting, adjustments to compensation based on the actual salary agreements, the proposed increase in travelling allowances and an increase in the subvention to the JUTC,” Clarke noted.

He said that the higher tax revenue expected in 2018/19 has been translated across to 2019/20.

The articulated debt strategy will continue to be pursued, as the country seeks to meet the 2025/26 debt to GDP target of 60 per cent. This is expected to result in a shift towards a higher proportion of the debt being denominated in Jamaican dollars, with a corresponding reduction in the foreign currency debt proportion.

The current forecast for the debt stock indicates a stock equivalent to 93.3 per cent at the end of 2019/20.

Clarke said that the medium term path outlined for the fiscal operations is expected to generate sustainability of the fiscal operations, thereby placing the country firmly on the path to achieving developed country status.