Kingston, Jamaica. January 15, 2024: The People’s National Party (PNP) has strongly refuted Prime Minister Holness’ assertion that his administration did not inherit a growing economy.
Junior Shadow Minister on Finance,Cleveland Tomlinson, said The Prime Minister’s statement was baseless and a clear act of political expediency, lacking in both truth and factual support.
Shadow Minister on Finance and the Public Service, Mr. Julian Robinson, MP, recalled that in 2011, the PNP inherited an economy teetering on the brink of collapse. An economic meltdown seemed inevitable.
In a statement today Tomlinson pointed out that Major policy missteps, by the then JLP government coupled with the collapse of the IMF Stand-By Agreement in 2010, severely damaged international confidence in Jamaica’s economy and severed our access to critical financing that was desperately needed.
The statement noted that when the PNP assumed office in 2011, Jamaica’s gross public debt had escalated to an unprecedented 147% of GDP from an estimated 115% in 2007, placing Jamaica among the most indebted nations globally.
This increase of over 650 billion dollars in public debt was accrued during the JLP’s four-year tenure. Under the leadership of Former Prime Minister Portia Simpson Miller and Former Finance Minister Dr. Peter Phillips, the PNP reduced the public debt to approximately 120% of GDP by 2016.
Tomlinson, The Junior Finance Shadow Minister, noted that at the end of 2011, the economy was declining, with a growth rate of negative 0.6%.
He said notwithstanding substantial government spending cuts to manage the public debt and comply with the IMF Extended Fund Facility (EFF) terms, the PNP managed to turn this around to a growth rate of 1.4% by 2016.
This growth occurred alongside a significant reduction in the inflation rate, from 7.56% inherited from the JLP to 3.68% by the end of our term.
Upon taking office, the PNP also faced critically low gross foreign reserves of around US$0.9 billion, sufficient for only about 6 weeks of imports, far below the recommended 12 weeks.
By the end of our term in 2016, the reserves had significantly improved to nearly US$3 billion, covering a minimum of 20 weeks of imports and reflecting a significantly healthier economic state.
“It is important that we set the record straight by acknowledging the substantial progress made under the PNP’s stewardship as illustrated by the attached graph. The JLP government inherited an economy that experienced consistent growth due to the PNP’s work in laying the foundation for macroeconomic stability’, said Robinson.
Tomlinson added that the PNP’s tenure from 2012 to 2016 was foundational for the country’s current macroeconomic stability.
The fiscal and economic reforms implemented, including strengthening the fiscal rules, reversing a long history of fiscal deficits, and initiating the preparatory work for the Bank of Jamaica’s independence, laid the groundwork for the current economic success.
Even then Finance Minister Audley Shaw acknowledged this in parliament in 2016, attributing the positive economic outlook at the time to the efforts of Dr. Peter Phillips.
The Holness Administration carried through with fiscal policy continuity when it came to office, benefiting from the solid foundation and policy ideas established by the PNP.
In the meantime, Senior Finance Shadow Minister Julian Robinson insists that the public deserves an honest and informed discussion about the nation’s economic journey, free from political mischaracterizations.
The Opposition therefore urges the Prime Minister to be factuall in his portrayal of Jamaica’s economic history and to acknowledge the substantial efforts made by the PNP during its tenure in office. (WiredJA)
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