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ECONOMIC
FOCUS
PSOJ—Economic Policy Committee
Monthly Members Forum for Jul-07
On Tuesday, 31 July, 2007 The PSOJ Economic Policy Committee (EPC) held their first Monthly Members Forum at the Terra Nova Hotel. The event was an attempt to bring to members of the private sector, the PSOJ vision for Jamaica from an economic standpoint... read more
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| The Economic Impact of Deficits |
| There continues to be much discussion and concern surrounding Jamaica’s fiscal situation, particularly as it relates to the persistent deficit and its impact on the national debt. In the last ten years, the debt and deficit have evolved as a pair of twin beasts feeding ravenously on the fiscal resources, to the detriment of critical social services such as health and education which have often been compromised for the sake of debt servicing. There have also been concerns, and rightly so, regarding the impact of the deficit and debt on the growth of the economy. But what really is this impact? How exactly do fiscal deficits affect economic activity and national income? We will briefly explore these questions by looking at the short-term and longer-term implications of deficit spending.
A fiscal deficit is a shortfall between Government’s revenues and its expenditures, and this shortfall must be financed by borrowing. There is no single hard-and-fast rule as to how a deficit will affect the economy. (Read More)
Sources: Ministry of Finance & Planning, STATIN
 Prepared by the PSOJ Research & Financial Services Unit
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