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Medium-Term Debt Management Strategy FY2020/21-FY2023/24 6 | P a g e

2.3 Public Debt Trajectory

Figure 1 highlights the net financing flows for the Central Government domestic and external

debt portfolios and the trajectory of the stock of total public debt from end-March 2019 to

end-December 2019. Financing activities of the GOJ over the review period reflected a

well- thought-out strategy to reduce net financing inflows. Amortization of a fixed-rate domestic

BIN in July 2019 of $40,523.5 million, a fixed-rate external BIN in June 2019 of

$11,586.8 million and net inflows of approximately $16,043.6 million from the re-opening of the

2045 JAMAN global bond in September 2019 were major contributors to net financing outflows

of $30,647.5 million for the period. Net outflows from the Central Government domestic and

external debt portfolios were $16,006.8 million and $14,640.6 million respectively.

Figure 1: Net Financing Flows and Trajectory of Public Debt

Notes: Financing flows and total public debt are in millions of Jamaica dollars.

Source: Ministry of Finance and the Public Service (MoFPS)

Throughout the review period, financing operations were consistent with GOJ’s objective to

reduce the debt-to-GDP. As highlighted in Figure 2, debt-to-GDP is expected to continue

trending downwards and is projected at 90.2 percent at end-FY2019/20, a reduction of

4.2 percentage points, compared to the 94.4 percent recorded at end-FY2018/19. With continued

commitment to strong fiscal discipline and prudent debt management, the GOJ is on track to

realize further reductions in the debt-to-GDP consistent with the legislated target of 60.0 percent

or less by FY2025/26.

Figure 2: Debt-to-GDP Trajectory

Source: Ministry of Finance and the Public Service (MoFPS).













Net Flows Domestic (LHS) Net Flows External (LHS) Total Public Debt (RHS)

133.1% 130.2% 122.5% 120.7%

101.0% 94.4% 90.2% 85.7% 79.9% 72.7% 66.3%

FY 2013/14 FY2014/15 FY2015/16 FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 FY2021/22 FY2022/23 FY2023/24

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Amortization on the external side was relatively in line with budget. However, on the domestic

front, principal payments were $3,726.0mn higher than planned reflecting the execution of a

liability management operation to buy back a nominal amount of near term debt instruments.

External amortization when compared to last year shows a significant decrease and this is due to

the transaction for the PetroCaribe Debt buy-back in July of 2015.

Public Debt

Jamaica’s total debt stood at $2,113,413.0mn at the end of July 2016. This represents a 2.2%

increase over the March 2016 stock. The Domestic debt stock is valued at $824,998.9mn (or

39.0% of total stock) and the External stock amounted to $1,288,414.1mn (61.0% of total stock).

Table 3C: Total Debt Stock

Mar-16 Jul-16


Domestic 815,948.5 824,998.9

External 1,252,810.7 1,288,414.1

Total 2,068,759.2 2,113,413.0

Source: MoFPS

This change in the external stock was largely influenced by the depreciation of the Jamaica dollar.

The change in the domestic stock was due mainly to (i) the addition of $6.0bn to the stock from

the reopening of a fixed rate instrument as well as (ii) depreciation which added $3.0bn to the US

dollar denominated instruments in the domestic portfolio.



The Overall Balance1 of sixty-five Self-financing Public Bodies (SFPBs) as approved by Parliament for FY 2015/16 was a surplus of $7,875mn. Total revenues of the group of SFPBs were budgeted at $409,162 mn from which a current balance of $58,214mn was expected.

1 The Overall Balance reflects the financing of a PB; increase or decrease in use of credit or improvement in cash deposits.

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Ministry of Finance and the Public Service Fiscal Policy Paper 2017 63 | P a g e

Both Domestic and External Interest costs, as a percent of GDP, are expected to fall from 3.3% and 4.0% of GDP in FY 2017/18 to 2.5% and 2.9% of GDP, respectively, in FY 2020/21.

Revenue and Grants

Revenue and Grants for FY 2017/18 are passively forecast at $526,345.4mn, or 27.9% of GDP, compared to the projected outturn of 28.2% of GDP for FY 2016/17. The forecast for FY 2017/18 represents a 5.7% increase over the projected outturn for FY 2016/17, which is slightly below the average annual increase of 7.6% over the last 3 fiscal years.

Tax Revenue is budgeted at $478,930.6mn (25.4% of GDP) and is expected to account for 91.0% of total Revenue and Grants, compared to 91.3% of the projected outturn for FY 2016/17. This forecast for Tax Revenue represents an increase of 6.0% ($27,217.8) over projected collections in FY 2016/17 (Table 3M). Tax revenue receipts in FY 2016/17 are projected to increase by 9.7% over the previous year. The budgeted increase in Tax Revenue is predicated on; inter alia, a projected 7.2% growth in nominal income in FY 2017/18, movements in other economic variables, as well as enhanced compliance activities by TAJ and JCA.

Table 3M: FY 2017/18 Revenue Forecast

Source: MoFPS

Contributing to the lower tax revenue growth in FY 2017/18, compared to the previous fiscal year, is the structure of some of the tax types, such as the specific SCT, which is comprised of fixed rates (not ad valorem) and accordingly will not grow in line with nominal GDP. Ceteris paribus, these taxes will therefore show a declining ratio in proportion to GDP, over time.

 Non-tax Revenue for FY 2017/18 is projected at $40,703.6mn, an increase of 17.5% from the projected outturn for FY 2016/17. This forecast amounts to 2.2% of GDP, up from the projected 2.0% of GDP in 2016/17. The projected increase is primarily due to enhanced distributions from the Self-Financing Public Bodies and Executive Agencies as well the de-earmarking of revenue flows to three Public Bodies.

The projected Non-tax Revenue for FY 2017/18 includes:

2016/17 2017/18 % Change

Revenue & Grants 494,801.6 526,345.4 6.4% Tax Revenue 451,712.8 478,930.6 6.0% Non-tax Revenue 34,633.0 40,703.6 17.5% Bauxite Levy 2,121.6 131.0 -93.8% Capital Revenue 521.8 2,228.1 327.0% Grants 5,812.3 4,352.1 -25.1%

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It is against this background that a Public Sector Learning Framework Policy was established by MIND with the support of key public sector stakeholders1, and with the endorsement of the Cabinet Secretary. The PSLF proposes a more systematic approach to whole-of-government human resource development, and serves as the GoJs blueprint for building a culture of continuous learning and innovation within the public sector, and provides a coordinated approach to systematically map pathways towards building the required competencies and developing the necessary skill sets that will allow public officers to deliver the best value goods and services. Along with its overarching objective to provide a coherent policy structure for human resource development within the sector, so as to enable economic development and societal wellbeing through the delivery of efficient citizen services, the PSLF also seeks to:

1. Provide a coherent policy for human resource development within the sector. 2. Stimulate, guide and promote the development of a public sector that is genuinely committed to lifelong

learning. 3. Build a culture of innovation among public officers for better business outcomes. 4. Enhance the human resource capabilities needed to support the fulfilment of Vision 2030 Jamaica:

National Development Plan (NDP). 5. Develop a responsive public service able to quickly adjust to the changing needs of government. 6. Integrate learning and development across the public sector. 7. Provide clarity and coherence to the matrices of learning focus areas across the different job levels in

the public sector. 8. Provide high quality, relevant and standardized training within the public service. 9. Facilitate access, mobility and progression in learning and professional development paths within the

sector. 10. Develop a source of evaluating or assessing investment in and impact of human resource development

within the sector.

The implementation of the PSLF is being led by MIND, supported by a PSLF Working Group, and governed by a PSLF Oversight Committee which is chaired by the Chief Executive Officer (CEO) of MIND. The Agency is supported by a PSLF Consultant/Advisor reporting through to the CEO.

3. SCOPE OF WORK Under the direct supervision of the PSLF Project Advisor/ Consultant the PSLF Project Officer will provide coordination support to ensure the achievement of the PSLF objectives and delivery of its outputs. Therefore, the PSLF Project Officer will:

o Liaise and coordinate activities with the relevant departments within the Agency in support of the implementation of the PSLF.

o Provide administrative support to the PSLF Project Advisor/ Consultant o Liaise with key external stakeholders to optimise access and to ensure timely organisation and

facilitation of activities relating to the PSLF implementation. o Assist with the design, development and dissemination of PSLF outputs. o Provide the necessary feedback, through reports and other forms of communiqué, on a timely basis, to

the PSLF Consultant/Advisor in order to inform engagements with the CEO and the PSLF Oversight Committee.

o Monitor PSLF implementation deliverables. o Draft any milestone and completion reports as necessary. o Provide input for the development of technical reports and other project outputs.

1 Cabinet Office, Ministry of Finance and Public Service (MoFP), Office of the Services Commissions (OSC), Strategic Human Resource Management Division within the MoFP, Jamaica Civil Service Association, Planning Institute of Jamaica and the Public Sector Modernisation Division and the Public Sector Transformation Unit, which have been recently amalgamated to form the Public Sector Transformation and Modernisation Programme.

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Ministry of Finance and the Public Service Fiscal Policy Paper 2021 Page 97



Introduction The COVID-19 pandemic has had detrimental effects on the GOJ’s fiscal and macroeconomic outlook. Prior to the onset of the pandemic, debt-to-GDP was on a downward trajectory, on track to meet the end-FY 2025/26 target of 60.0% or less, the Government was recording consistent fiscal surpluses, and unemployment was at a record low of 7.2%6. Fiscal prudence on the part of the GOJ has ensured a creditable response to the shock of the pandemic. While debt-to-GDP is expected to increase to 110.1% at end-FY 2020/21, 15.3 percentage points higher than the end-FY 2019/20 outturn, the ratio is expected to return to a downward trajectory in the upcoming fiscal year. The fiscal rule requiring the Government to record a fiscal balance consistent with the FY 2025/26 debt target was suspended as Jamaica was declared a disaster area and the impact of the pandemic was estimated to be in excess of 1.5% of GDP. This has led to the establishment of a new target date of end-FY 2027/28. As the GOJ works towards the achievement of this new fiscal target, it is crucial to monitor the various risks with the potential to compromise this and other targets. This Fiscal Risk Statement outlines and assesses the GOJ’s exposure to fiscal risks originating from sources such as: deviations from the macroeconomic assumptions used in preparing the FY 2021/22 budget and medium term projections; contingent liabilities which may arise from natural disasters, the operation of public bodies, public private partnerships and judicial awards; wage settlements; and monetary policy. The statement also highlights measures already taken and underway, as well as those being explored by the GOJ to address and mitigate these risks. Fiscal Risk Sources and Disclosure The major risks that the GOJ, through the MOFPS, actively monitors and manages are highlighted in Table VII (a).

6 Unemployment rate at October 2019

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