04 September 2015
The Treasury and Resources Minister Senator Alan Maclean has welcomed the eighth annual report of the Fiscal Policy Panel (FPP) and the Panel’s improved estimates for Jersey’s recent economic performance.
The Panel have increased their estimate for economic growth in 2014, with strong growth of between 4.5% and 6.5%, due to a large increase in finance sector profits, although some of this may prove to be ‘one-off’. Further, more moderate real growth is expected in 2015-17.
The Panel’s annual report has also highlighted that Council of Ministers is following the Panel’s principles in developing the draft Medium Term Financial Plan (MTFP), due to be debated by the States Assembly in early October.
Senator Maclean said “The Council of Ministers and States Departments have had to make extremely difficult decisions in developing the MTFP, decisions that will have to be fully implemented, and it is encouraging that our independent advisers are supportive of our position and our focus on reforming the public sector, economic growth and productivity.”
Economic recovery
The FPP report also indicates the Panel’s support of the approach taken in the MTFP to gradually withdraw fiscal stimulus from the economy as it recovers, and to use the States' reserves in the meantime while the measures planned to bring the States' finances back into balance are phased in.
“The Panel’s advice that we should focus on structured action on economic growth, productivity improvements, encouraging enterprise, innovation and competition, is another welcome indication that the priorities identified in the Council of Minister’s Strategic Plan for this term of office are the right ones for Jersey at this time. We will continue to develop and review our policies in these areas.”
Senator Maclean will consult with the Council of Ministers before providing a more comprehensive response to the FPP’s report but will continue the work to ensure that the second part of the MTFP, which will be brought forward in 2016, addresses the recommendations made.
These recommendations include maintaining flexibility in the MTFP, providing the details for future savings and efficiencies and managing how capital projects are delivered if there is a significant risk of a build-up in inflationary pressure.
The Fiscal Policy Panel (FPP) makes recommendations to the Treasury Minister and the States of Jersey on its fiscal policy, making reference to the strength of Jersey’s economy, the global and local economic outlook, Jersey’s economic cycle and the sustainability of States of Jersey finances.
Download Fiscal Policy Panel Annual Report September 2015 (size 1.1mb)
gov.je