The country’s independent fiscal monitor has raised concerns that more than $57 billion that were programmed by the central Government and several self-financing public sector bodies for capital works projects in the last financial year were unspent.
Self-financing public bodies (SFPBs) accounted for $42.8 billion in underspend on capital expenditure, while capital expenditure by the central Government fell by $14.8 billion, the Independent Fiscal Commission (IFC) disclosed in its report on Jamaica’s economic performance for the 2025-2026 fiscal year.
The IFC is Jamaica’s non-partisan oversight body tasked with monitoring, assessing and reporting on the Government’s compliance with fiscal rules.
The $42.8 billion accounted for a large chunk of the $56.4-billion overall balance surplus held by SFPBs at the end of March this year, compared with a projected surplus of $15.2 billion, the IFC said, citing preliminary data.
The National Housing Trust ($19.5 billion); the Housing Agency of Jamaica ($4.1 billion); the Port Authority of Jamaica ($3.8 billion); the National Water Commission ($3.3 billion); and the Urban Development Corporation ($2.7 billion) were the top five agencies responsible for the underspend in capital expenditure, according to the 56-page report made public yesterday.
“That roughly 36.0 per cent of capital expenditure for the Specified Public Sector (central Government and select SFPBs combined) [that] was unspent during the year underscores the deep-rooted slow pace in the implementation of capital projects and continued uncertainty in fiscal planning and budget execution,” the oversight body lamented.
On the Government side, it noted, too, that the $14.8-billion, or 23 per cent, decline in capital expenditure below the originally projected amount was due “mainly to a slower-than-programmed pace of execution of several planned public investment projects”.
The IFC said these resulted from challenges, including procurement and national capacity constraints, both in the public and private sectors.
The oversight body reiterated that underspending of budgeted expenditure signals an implementation lag in the execution of projects and programmes rather than actual savings by the Government.
“This is a long-standing issue that needs to be resolved, bearing in mind the beneficial impacts that major capital projects have on economic growth.”
The IFC noted that the newly created National Reconstruction and Resilience Authority is expected to speed up execution for select projects, but said the “inertia” that obtains for regular projects across the public sector may persist into the medium term.
The oversight body said, overall, Jamaica’s macroeconomic pillars remain “sound”, despite the “monumental economic shock” from Hurricane Melissa last October, which left a trail of destruction estimated at $2 trillion, or 56.7 per cent of Jamaica’s gross domestic product for 2024.
It noted that following the temporary suspension of national fiscal rules, several key economic indicators performed better than the post-hurricane predictions. Among them, the IFC said, was the 4.3 per cent headline inflation recorded at the end of March this year.
This was significantly below the post-Melissa projections of 10 and 5.7 per cent and the target band of 6.0 set by the Bank of Jamaica, the IFC noted.
Another positive indicator, the oversight body said, was the public debt-to-GDP ratio of 65.6 per cent, which came in lower than the post-hurricane projection of 68.9 per cent.
livern.barrett@gleanerjm.com
