Dr Clarke: Ukraine Invasion Will Impact Global Economy

Speaking at the Standing Finance Committee on Tuesday, Finance Minister Dr Nigel Clarke says Russia’s invasion of Ukraine will impact the global economy – He was responding to questions from the opposition on the country’s financial plan for the 2022/23 fiscal year.

Finance Minister Dr Nigel Clarke announced the government’s planned expenditure of over 1 trillion dollars for the fiscal year, in response, Opposition Spokesman on Finance Julian Robinson questioned the government’s previous budget. In that budget, the projected oil price was at 45 US Dollars per barrel, but the year ended with oil costing some 73 USD per barrel.

Dr Clarke notes the country ended up with a surplus last year, therefore though average oil prices were elevated than assumed, Jamaica ended up with a positive current account situation and in a very healthy balance of payment position.

Opposition Spokesman, Julian Robinson raised concerns about the rising inflation and the Bank of Jamaica inevitably increasing interest rates, which could lead to an additional 6.5 billion in domestic and external debt servicing costs.

Concerns were raised about the Central Bank’s expectation for inflation to remain elevated this calendar year. Dr Clarke says with the invasion of Ukraine, the macro environment has changed in the short term, which could influence the evolution of the average inflation over the fiscal year. He suggests even if inflation rises it will again fall by next March 2023. More details in the report below:

Reporter: Justin Graham