Damion Mitchell, News Coordinator - Radio

Prime Minister Bruce Golding (second left) addresses journalists during a post-Cabinet press briefing at Jamaica House, St. Andrew, on Wednesday. With the PM (from left) are Minister of Information, Sports, Youth and Culture, Olivia Grange, Cabinet Secretary, Carlton Davis, and Director General of the Planning Institute of Jamaica, Dr. Wesley Hughes. - Norman Grindley/Deputy Chief Photographer

Prime Minister Bruce Golding on Wednesday sought to assure the public that there were no immediate plans to cut the size of the public sector, but that the civil service wage bill had to be contained in order to attain some of the country's fiscal targets.

He said the Government was about to enter discussions with the Jamaica Confederation of Trade Unions for the establishment of the third public sector memorandum of understanding. He warned that the Government would not be in a position to honour unrealistic salary demands.

The Jamaica Teachers' Association has already submitted a claim for a 100 per cent increase over two years, but the prime minister dismissed such a demand as unrealistic given the current economic climate.

"I suspect that is just an opening shot," Golding said. "I don't think that anybody could ever expect that in our situation."

Revised fiscal targets

The prime minister, who was speaking during a post-Cabinet press briefing at Jamaica House, pointed to a two per cent inflation rate in December alone.

It is expected that the inflation rate for the current fiscal year will be about 13 per cent.

The prime minister said the Government had revised some of its fiscal targets because of external and domestic shocks like poor weather conditions.

He said the fiscal deficit, for example, had been increased from four-and-a-half per cent to five-and-a-half per cent for this administrative year. This means the Government will have to borrow about $6 billion more than was originally projected this fiscal year to fund the budget. Golding said that over the next five years, debt to gross domestic product (GDP) ratio should be reduced to about 95 per cent. In other words, the total public debt as a percentage of GDP, which is the combined value of goods and services, will drop by about 40 percentage points.

PM expects growth

At the same time, the prime minister said he was expecting the Jamaican economy to start growing at no less than three per cent of GDP a year.

He said the Government was in discussions with investors for the establishment of several large projects, which would help to drive the economy and create jobs.

The prime minister said Cabinet had agreed to the resumption of the partnership-for-progress initiative as a means of promoting investment to attain the growth targets.

Golding also announced that the recommendations from the November 2007 Montego Bay Summit involving private sector groups would be implemented.

On Tuesday, Golding is to meet with the members of a special monitoring committee, comprising Government and private sector representatives, which has been established to oversee the implementation of the recommendations.

damion.mitchell@gleanerjm.com