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Ministry of Finance and the Public Service Fiscal Policy Paper 2021 Part 1 | Page 108

Figure VII (m): Estimated Financing Gaps for Emergency Losses

Source: WBG & MOFPS Notes: High severity – Category 5 hurricane and a major earthquake; Medium severity – Category 3 hurricane; Low severity – Category 1 hurricane. *CCRIF payments are estimated and may differ from actual events. National Natural Disaster Risk Financing Policy Committed to ensuring that there are sufficient mechanisms available for disaster relief, recovery and reconstruction without significant recourse to the national budget, the GOJ is crafting a national policy to guide disaster risk financing. The draft policy, which is slated to be tabled in Parliament within the first half of FY 2021/22, proposes a risk-layered approach to disaster risk financing and also places focus on the need for an up to date GOJ asset register to facilitate the insurance of public assets, as well as the importance of private insurance to limit the implicit liability of the Government in the event of debilitating private losses. Public Bodies The operations of public bodies pose a risk to the Central Government budget to the extent that these entities are unable to service debt, whether government guaranteed or otherwise, cover their operating expenses or satisfy their investment needs. Subject to the Public Bodies Management and Accountability (PBMA) Act, public bodies may only access loans with the approval of the GOJ. At the same time the Public Debt Management Act (PDMA) legislates that government guaranteed loans (GGLs) should be no more than 8.0%, 5.0% and 3.0% of GDP at end-FY 2016/17, FY 2021/22 and FY 2026/27, respectively. As at end-December 2020, GGLs-to-GDP was recorded at 4.7%, 0.3 percentage point below the 5.0% limit set for FY 2021/22. While the nominal value of GGLs has been decreasing, shocks to GDP growth could compromise the achievement of these targets. Additionally, given the severe economic impact of the COVID-19 pandemic, public bodies may be required to seek guarantees in order to borrow. The GOJ

$159.8

-$45.4

-$243.2 -400

-200

0

200

400

600

800

High Medium Low

Contingencies Fund & NDF CCRIF-SPC*

IDB Contingent Credit Financing Gap

...
June 12, 2021


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