Wage bill target missed, government seeks more time from IMF

Jamaica is seeking the permission of the International Monetary Fund (IMF) to extend by one year, the target of reducing the public sector wage bill.

The country had agreed with the IMF that the wage bill would be lowered to nine per cent of GDP by March 2016.

Laws were also passed by the parliament making the target hard-wired.

However, Finance Minister, Dr Peter Phillips, says he intends to take a bill to parliament to amend the fiscal rules to allow for the extension. 

He also says discussions are taking place with the IMF to allow for the adjustment.

The extension of the wage target comes as the government seeks to negotiate a new wage agreement with public sector workers who have endured a wage freeze for five years.

Wages as a percentage of GDP is currently estimated at 10.1 per cent for 2014/2015 and is projected to fall to nine per cent by March 2017.

The target set out in the fiscal rules is 9 per cent by March 2016.

The Finance Minister was speaking at the Standing Finance Committee of the House of Representatives today.