All one can do as an analyst is to apply your understanding to policies and actions, make your assessments, then see if they’re borne out by later events or data.

I’ve said repeatedly that Jamaica’s government is running a fiscal policy that is not conducive to growth. Now, the pieces are beginning to show that to be the case.

Yesterday, the acting financial secretary in the ministry of finance reported to parliament that growth in the first fiscal quarter was negative: see Gleaner report.

In recent days we also learned that PAYE revenues are down in the first four months of the fiscal year, to July. That should have been no surprise, after relieving people of tax obligations by raising the threshold and making it punitive for those who exceeded the thresholds. So, smart and rational people who look set to earn more wound want remuneration in ways that didn’t put them into higher tax brackets. It’s not complicated. It’ll take some more thinking to understand why this is happening while employment has increased. One obvious answer is that people are getting jobs that pay below the PAYE threshold. That would make sense on several levels, not least the type of jobs supposedly growing.

The other nugget on negative growth was that the primary budget surplus was larger than envisaged under the IMF program.

Personally, I can’t wait to read the next IMF staff report to see how it stitches together this quilt that looks tattered. 🤔