Mr Audley Shaw, the finance minister, has warned Jamaicans against having "unrealistic expectations" of the Budget which he is to table in Parliament towards the end of the month.

We appreciate the minister's, and by extension, the Government's strategy. When it came to office, it was on a wave of high expectations, and assumptions among many voters that Jamaica's problems are to be easily solved. Indeed, the Jamaica Labour Party (JLP), as is the wont of political parties in Opposition, fanned those visions of plenty, easily... and readily.

In the wake of the realities of recent months, the administration is now attempting to manage expectations. For, as Mr Shaw said in his Montego Bay speech last Saturday night, "the challenges are great" and there is no "magic wand". Moreover, many of the issues confronted by the Government are global in nature - high oil prices and a dodgy market for credit - and beyond Jamaica's control.

The real test for Mr Shaw, therefore, is the credibility of the Budget that he presents in a fortnight's time and how effective he and Prime Minister Bruce Golding are in resisting the temptation, and pressures from their parliamentary table, in serving up all their pre-election promises. If they can and are able to maintain fiscal discipline, the administration just might be able to pull through this fiscal year and set a foundation for the future.

Mr Shaw has sought to paint a deliberately scary picture of a $50-billion additional debt servicing bill from the current fiscal year, which ends on March 31. This, largely, represents a fiscal deficit of an estimated 5.5 per cent of GDP, which the administration expects to be the out-turn of this fiscal year. The impact here is on interest costs which, overall, are expected to rise about 10 per cent to around $110 billion dollars.

What this underlines is the necessity of the Government holding to its deficit target of 4.4 per cent of GDP for the coming fiscal year, followed by a deficit of 2.2 per cent in 2009-2010 and a balanced budget in 2011.

For the administration to achieve this, a number of things are important. Inflationary pressures of the past years and Mr Shaw's pre-election suggestion, if not explicit promise, that he will substantially increase public sector wages will fuel pay demands.

The Government will have to resist this, or decide to take the tough decision of cutting perhaps 20,000 public sector jobs. The rise in the wage bill over the next two fiscal years ought to be kept in the 20 per cent range. Additionally, Mr Shaw will have to maintain a tight hold on programme and other capital spending, which he should be in a better position to do in the absence of hurricanes and other catastrophes of recent years.

At the same time, Mr Shaw will have to push through the kind of policies that encourage economic growth and a rise of taxation revenues close to the level of the current fiscal year. And the minister and his advisers will have to be skilled in timing their intervention in the global market to roll over the estimated US$300 million bond that falls due this fiscal year.

It will all demand a delicate balance.