When Dr Nigel Clarke takes the podium this month to deliver Jamaica’s 2021-2022 Budget, that ritualistic activity that will guide the Government’s priority for the fiscal year, all eyes will be set on what plans and programmes will be rolled out to kick-start the economy post-COVID-19. The most-watched area will be job creation and restoration of confidence around economic growth.

While economic growth is an important outcome, the last thing we will want is jobless growth at this critical time in the country’s recovery. Indeed, before the COVID-19 onset in March 2020, unemployment was at a low of circa seven per cent, that is, roughly about 100,000 persons could not find a job. While the numbers could be lower, it is still an achievement coming from early 2013 when more than 15 per cent of the labour force could not find jobs and gain a meaningful income to take care of their basic needs in life.

COVID-19 pushed back many persons in that dreadful situation of not having a job and, as such, cannot afford to pay basic bills, provide food and decent shelter for their families. The number one priority of Budget 2021, therefore, is to restore hope that joblessness will not be long-lived and that there are tangible initiatives in place to reverse the COVID-19 curse.

WHAT ARE THE EXPECTATIONS?

The fiscal policy paper for the 2021-2022 provides some insights as to what will be on the table to reverse the COVID-19 curse. The Government is overly optimistic in predicting growth in real GDP of 4.1 per cent for 2021-2022 fiscal year. Despite the low base from which it will measure growth in 2021, the idea that there will be revenge spending that will stimulate aggregate demand seems quite optimistic.

With unemployment numbers in double digit and people still uncertain about their future, it is more than likely that persons will use 2021 as a year of watch and see instead of splurging their cash. So, the exuberance to spend, that is expected, will not be realised until maybe the last quarter of 2021, by which time it will not be sufficient to generate a 4.1 per cent growth in GDP. I would not bet on this outlook for 2021-2022.

http://jamaicagleaner.com/article/commentary/20210307/densil-williams-budget-2021-and-recovery-will-it-be-sufficient