Ahead of Last Year, Behind the Plan

The Ministry of Finance and the Public Service published Jamaica’s Central Government Operations table for June 2026 on 31 July, and it closes the first quarter of fiscal year 2026/27. Read down the year-on-year column and the quarter looks like a recovery. Revenue and grants reached J$264.77 billion, up J$32.58 billion or 14.0 per cent on April to June 2025. Tax revenue rose 19.0 per cent. The fiscal deficit narrowed from J$38.25 billion to J$23.76 billion. Read down the against-budget column instead and the same quarter misses on almost every line, with revenue J$28.72 billion below the budget profile, a shortfall of 9.8 per cent. The figures are central government, on a cash basis, and the fiscal year runs April to March. Last year’s first quarter came in within J$16.7 million of its own budget. That is a variance of less than one hundredth of one per cent. The forecasting did not slip by a little.

The shortfall is not the economy failing to produce taxable activity. Tax revenue of J$253.89 billion was 19.0 per cent up on the year, and company profits tax collected J$42.81 billion against J$18.91 billion a year earlier, a rise of 126.4 per cent. That jump has a mechanical cause the Fiscal Policy Paper sets out. Bills have been tabled to move the filing and payment date for company profits tax to 15 April, which pulls receipts that used to arrive later into the opening month of the year. April alone brought J$25.55 billion on that line, more than the whole of the previous year’s quarter. Even with the calendar working in its favour, the line finished 23.7 per cent below budget. The sharper miss sits in non-tax revenue, which brought J$9.77 billion against J$20.27 billion budgeted. That single line is under seven per cent of the revenue plan and it accounts for 36.5 per cent of the entire shortfall.

What kept the deficit near its target was not revenue. Expenditure finished at J$288.53 billion, J$19.49 billion below the budget profile, so 67.8 per cent of the revenue shortfall was absorbed by money the government did not spend. The restraint was not spread evenly. Compensation of employees landed within 0.31 per cent of budget, about as close to plan as a quarter of a wage bill ever gets. Capital expenditure came in at J$13.73 billion against J$17.60 billion budgeted, 22.0 per cent short, and programmes were 9.3 per cent short. Those two lines supplied 73.6 per cent of the underspend between them. Capital spending was not falling either. At J$13.73 billion it stood 55.8 per cent above the same quarter of 2025. Reconstruction is moving faster than last year and still cannot reach the pace its own budget set for it. The wage bill is the line that does not flex, so the adjustment lands where the rebuilding is.

Which balance you read decides the verdict. On the overall balance, which takes loan receipts and amortisation into account, the quarter finished J$2.60 billion better than its budget at a deficit of J$46.64 billion, helped by amortisation running J$3.31 billion light. The primary balance is where this matters. Jamaica banked a primary surplus of J$17.93 billion in the quarter, about US$113 million at the Bank of Jamaica’s weighted average selling rate of J$158.87 to the US dollar on 12 August. The budget profile asked for J$31.91 billion, so the quarter came in 43.8 per cent below plan. Now set that against the year. Table 1B of the Fiscal Policy Paper puts the full-year primary surplus for FY2026/27 at J$20.30 billion, and Table 3J puts it at 0.5 per cent of GDP. The budget asked the opening quarter alone to bank more than the whole year, because the remaining months are planned to spend it back down on reconstruction. The first quarter was the one that had to deliver, and it delivered J$13.98 billion less than asked. Hurricane Melissa made landfall on 28 October 2025, and in December the fiscal rules in the Fiscal Responsibility Legislation were temporarily suspended for a period up to end-March 2027, with the government stating it will pursue a debt ratio of 60.0 per cent by end-FY2029/30. A suspended rule is not an abandoned one. It does mean that this year the only thing holding these numbers to their path is the path itself, and the first quarter has already stepped off it.