Minister of Finance Fayval Williams is dismissing reports that the proposed Budget for the upcoming 2025-2026 financial year signals a contraction in spending.
The Government is planning to spend $1.26 trillion for the financial year 2025-2026.
This is $126 billion, or 9.1 per cent, less than last year’s revised Budget of $1.38 trillion. Given the five per cent inflation experienced up to December, the Government’s Budget is in effect about 14 per cent less than last financial year.
Fayval Williams, minister of finance and the public service, tabled the 2025-2026 Estimates of Expenditure in Parliament yesterday, revealing that just under $1.1 trillion of the Budget will be financed by taxes and other receipts, while about $158.44 billion in loans will satisfy the shortfall.
The bulk of the expenditure, nearly $1.20 trillion, will go towards recurrent or day-to-day expenditure. The money for recurrent expenditure in this year’s Budget is $127 billion less than the expenditure for the last financial year.
Only $62.59 billion of the tabled Budget will go towards special projects or capital expenditure. This is about the same as the revised capital budget estimates for financial year 2024-2025.
But, in a media release on Friday, Williams says the reports regarding a spending cut are misleading.
“There are indeed spending cuts that are specifically related to Jamaica’s debt servicing (amortisation and interest payments). As a point of information, these declined significantly for FY 2025/26 versus FY 2024/25 by J$159.4 billion. This is a good thing for Jamaica’s economic health especially because in the past, our national budget would reflect major payments towards interest payments. This is no longer the case,” Williams said.
“Interest expenses as a % of tax revenues: 33.6% FY 2014/15 and 18.7% FY 2025/26:
The finance minister further explained that the reduction in debt-related payments has allowed the Government to prioritise increased investment in key sectors, including education, and healthcare.
“Our fiscal strategy remains focused on growth and resilience. When, as a country, we have lower debt obligations, we can allocate more resources toward initiatives that directly improve the quality of life for Jamaicans and drive sustainable development.”
She emphasised that the overall expenditure for FY 25/26 reflects the Government’s commitment to sound fiscal management that has been a hallmark of this administration while ensuring that critical services remain well-funded.
“By reducing our debt burden, we are strengthening Jamaica’s economic stability, improving our ability to respond to global financial changes and external shocks, while ensuring that we continue on the path of sustained growth and prosperity,” Williams added.
The finance minister is encouraging the public and stakeholders to review the fiscal documents in their entirety to gain a clear understanding of the Government’s financial strategy and priorities.
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