Finance Minister Fayval Williams is refuting claims that the proposed Budget for the 2025-2026 financial year indicates a decline in spending.
The Government is set to allocate $1.26 trillion for the financial year 2025-2026.
This amount represents a reduction of $126 billion, or 9.1 percent, compared to last year’s revised Budget of $1.38 trillion. Accounting for the five percent inflation recorded until December, the Government’s Budget effectively amounts to around 14 percent less than the previous financial year.
Williams, the minister of finance and public service, presented the 2025-2026 Estimates of Expenditure in Parliament yesterday, indicating that nearly $1.1 trillion of the Budget will be sourced from taxes and other revenues, with approximately $158.44 billion in loans covering the remaining gap.
The majority of the spending, close to $1.20 trillion, will be directed towards recurrent or everyday expenses. The funding for recurrent expenditure in this year’s Budget is $127 billion below that of the last financial year.
Just $62.59 billion of the presented Budget will be earmarked for special projects or capital expenditures, remaining consistent with the revised capital budget estimates for the 2024-2025 financial year.
However, in a press release issued on Friday, Williams stated that reports suggesting a reduction in spending are misleading.
“There are indeed specific spending cuts related to Jamaica’s debt servicing (amortization and interest payments). Notably, these have decreased significantly for FY 2025/26 compared to FY 2024/25 by J$159.4 billion. This is a positive development for Jamaica’s economic health, particularly since our national budget historically reflected significant interest payments. This trend is no longer present,” Williams explained.
“Interest expenses as a % of tax revenues: 33.6% in FY 2014/15 and 18.7% in FY 2025/26.”
The finance minister further clarified that the reduction in debt-related payments has enabled the Government to enhance investment in critical sectors, such as education and healthcare.
“Our fiscal strategy remains centered on growth and resilience. With lower debt obligations, we can direct more resources towards initiatives that enhance the quality of life for Jamaicans and promote sustainable development.”
She underscored that the total expenditure for FY 25/26 reflects the Government’s commitment to prudent fiscal management, a principle that has defined this administration, while ensuring that essential services are adequately funded.
“By alleviating our debt burden, we are reinforcing Jamaica’s economic stability, enhancing our capacity to respond to global financial fluctuations and external shocks, while continuing on the trajectory of sustained growth and prosperity,” Williams added.
The finance minister encouraged the public and stakeholders to thoroughly review the fiscal documents to fully comprehend the Government’s financial strategy and priorities.
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