IFC flags $57b capital works underspend across housing, water and port bodies

Jamaica’s independent fiscal watchdog says it is concerned that the central Government and several self-financing public bodies failed to use more than $57 billion allocated for capital works in the last financial year.

In its report on Jamaica’s economic performance for the 2025-2026 fiscal year, the Independent Fiscal Commission (IFC) said self-financing public bodies (SFPBs) were responsible for $42.8 billion in capital expenditure underspending. Central Government capital spending was also $14.8 billion below plan.

The IFC is the country’s non-partisan fiscal oversight institution, with responsibility for monitoring, evaluating and reporting on whether the Government is meeting its fiscal rules.

According to preliminary data cited by the commission, the $42.8-billion shortfall by SFPBs helped push their overall balance surplus to $56.4 billion at the end of March this year. That was far above the $15.2-billion surplus that had been projected.

The 56-page report, which was made public yesterday, identified the National Housing Trust as the largest contributor to the capital spending gap, with $19.5 billion unused. It was followed by the Housing Agency of Jamaica at $4.1 billion, the Port Authority of Jamaica at $3.8 billion, the National Water Commission at $3.3 billion, and the Urban Development Corporation at $2.7 billion.

“That roughly 36.0 per cent of capital expenditure for the Specified Public Sector (central Government and select SFPBs combined) [that] was unspent during the year underscores the deep-rooted slow pace in the implementation of capital projects and continued uncertainty in fiscal planning and budget execution,” the IFC said.

For central Government, the commission said the $14.8-billion shortfall, equal to 23 per cent of planned capital expenditure, was linked “mainly to a slower-than-programmed pace of execution of several planned public investment projects”.

The IFC said the delays reflected several problems, including procurement difficulties and capacity limits across both the public and private sectors.

It again cautioned that when budgeted spending is not carried out, it points to delays in implementing projects and programmes, rather than genuine savings for the Government.

“This is a long-standing issue that needs to be resolved, bearing in mind the beneficial impacts that major capital projects have on economic growth,” the commission said.

The IFC said the newly established National Reconstruction and Resilience Authority is expected to help move selected projects more quickly. However, it warned that the “inertia” affecting ordinary public sector projects could continue over the medium term.

The commission also said Jamaica’s main macroeconomic foundations remain “sound”, even after the “monumental economic shock” caused by Hurricane Melissa last October. The storm left damage estimated at $2 trillion, equivalent to 56.7 per cent of Jamaica’s 2024 gross domestic product.

After the temporary suspension of the national fiscal rules, several major economic indicators outperformed the forecasts made after the hurricane, the IFC said.

One of those indicators was headline inflation, which stood at 4.3 per cent at the end of March this year. The IFC said that was well below the post-Melissa projections of 10 per cent and 5.7 per cent, and also below the Bank of Jamaica’s target band of 6.0 per cent.

The commission also pointed to the public debt-to-GDP ratio, which was recorded at 65.6 per cent. That was lower than the 68.9 per cent forecast after the hurricane.