Fri | Mar 29, 2024

Hyman expects tabling of historic trillion-dollar Budget today

Published:Tuesday | February 14, 2023 | 1:21 AMErica Virtue/Senior Gleaner Writer
Financial analyst Ralston Hyman.
Financial analyst Ralston Hyman.

With government expenditure ending the financial year at $998 billion, at least one economist is expecting that Finance Minister Dr Nigel Clarke will table the first trillion-dollar Budget today, when he presents the Estimates of Expenditure for the 2023-2024 financial year.

Economist Ralston Hyman believes Clarke will have to pacify hostilities in the country, while allocating significant sums to fix poor road infrastructure and give a boost to the education sector.

“I am expecting a Budget of something in the region of $1.1 trillion. Last year, when the Budget was $912 billion, $86 billion more was added so it ended up at $998 billion, $44 billion of which was for public sector salaries. So the public sector wage bill will increase based on the compensation review. It will cost about $100 billion in the next three years,” Hyman told The Gleaner on Monday.

He is anticipating that the public sector wage bill for FY 2023-2024 will be between $280 billion and $300 billion and that debt service charges will come in at about $350 billion based on the higher interest regime being pursued internationally.

The economist expects an additional $10 billion for the education sector and between $60 billion and $80 billion set aside for road infrastructure, which he said was still not enough, but had been cut by $2.6 billion in the Supplementary Estimates

“I expect them to compensate this year because the revenues have been generated. Between April to December 2022, they collected $567 billion, and the amount they expected was $559 billion. So they were $7.7 billion ahead of what they expected. The primary surplus, that is the money they used to service the debt, was $119 billion, while they expected $103 billion. So they were $15 billion-plus ahead, in terms of what was needed to service the debt,” Hyman explained.

“So I expect that they will spend on some of the things they didn’t last year because they have the money. They must spend on roads, particularly the rural roads for agriculture; to prioritise education; to fight crime, as Professor Orlando Patterson said you can’t just buy more cars for the police to fight crime and ignore the infrastructure in the system,” he noted.

Hyman said that the Government faces a big energy bill, which would have been significantly lower if the PetroCaribe agreement was still in place or it had kept the oil hedge fund. The Russia-Ukraine conflict and the Saudi Arabia’s demand for US$100 per barrel of oil will impact the Budget, the economist reasoned.

“The biggest bill we have in our lives is energy and that will end up [about] $2.5 billion, given that for the first nine months of last year, it was $1.8 billion. So we expect them to give incentives for persons in the energy business. Those are the expectations,” said Hyman., adding that this would address some concerns expressed by Jamaicans.

The Government, he said, will be forced to spend on roads, given the view that sanctions under the Road Traffic Act amount to a revenue-generation plan.

“The people are correct based on what they have seen happen over the years in previous Budgets. It’s the same thing with the Throne Speech. There is always a gap between what the governor general says at the beginning of the year, and what happens at the end of the financial year,” said Hyman.

erica.virtue@gleanerjm.com