Don Wehby, minister without portfolio in the Ministry of Finance and the Public Service. - Rudolph Brown/Chief Photographer

Senator Don Wehby, minister without portfolio in the Ministry of Finance, is holding to projections of 15-17 per cent for fiscal inflation, the same levels forecast by the central bank back in summer.

At the same time, he was critical of commentators who are sceptical that tourism is performing as strongly as the Government has been suggesting.

"Up to September of this year, our tourist arrivals, compared to the previous year, were showing an increase of 5.5 per cent. There is no decline," said the minister.

"In fact, December is looking quite strong (and) the figures show that we will have an increase year over year of about five per cent for tourist arrivals. So it's not a doom and gloom as being portrayed in some places."

He also predicts that price movements in October will be contained at one per cent or below, comparable to September's inflation out-turn of 0.6 per cent.

Wehby's confidence rests on the reduction in world commodity prices, oil and grains especially, that had seen inflation rising by two per cent per month up to August.

Inflation

"It has started to trend down and I expect that despite the movement in the rate of exchange, that inflation will again come in under one per cent for October, which is good," Wehby told business leaders and senior executives at the Jamaica Employers' Federation's latest CEO Breakfast on Tuesday.

The Jamaican currency is trading at $77 to US$1.

The Budget was originally cast on inflation of 10 per cent, but spiralling world oil prices which rose as high as US$147 - now below US$60 per barrel - and rising agriculture prices derailed those targets early in the fiscal year.

Fiscal inflation was running at 11 per cent up to September, while calendar inflation is at 16.8 per cent.

The Statistical Institute of Jamaica is yet to publish prices for October.

Wehby said the reduction in oil prices would impact positively on the country's balance of payments.

Remittances

"If the price of oil remained at US$140 per barrel, our import bill would have been US$3.6 billion annually," he said.

"If the price of oil remains at US$65 per barrel, it would calculate out to US$2.6 billion."

The minister reported too that the figures on remittance inflows were still above those for the same time last year. Wehby said he expected that remittances, the single-largest foreign exchange earner for the country, will come out above the US$2-billion mark at year end, despite the financial collapse and record unemployment in the United States.

He noted that while some Jamaicans have been affected, resulting in remittances dropping from 11 per cent during the first quarter of the year to about 8.0 per cent now, "we are projecting an increase on remittances year over year of six per cent," Wehby said.

john.myers@gleanerjm.com