Jamaica’s government said it would raise bus fares in a bid to slow the growth of subsidies as the country tries to address a debt load estimated at 140 percent of gross domestic product.
Bus fares for adults will rise 20 percent to 120 Jamaica dollars ($1.07) while the cost for senior citizens will triple to 60 Jamaica dollars, Transport Minister Omar Davies told reporters yesterday. Government support for the Jamaica Urban Transport Co. has cost the government 2 billion Jamaica dollars over the past year, Davies said.
“The company continues to lose significant sums as revenue continues to be outpaced by expenditures,” Davies said, adding that fuel costs had climbed 37 percent in the April-to-July period from a year earlier.
After two defaults on local bonds since 2010, Jamaica won praise from the International Monetary Fund this year when the government generated its first budget surplus since 1995 after cutting tax deductions and limiting public sector wage growth. The IMF helped the island win a $2 billion package of loans after restructuring about $9 billion in local bonds last year.
Opposition leaders rejected the increase and said they may stage a public protest against the measure.
Jamaica’s $15 billion economy expand for a third consecutive quarter in the first three months of the year following six consecutive quarters of contraction. International reserves jumped to $2.2 billion in July, the highest in three years.
Jamaican dollar bonds have returned about 18 percent this year compared with 9.5 percent for emerging market debt, according to JPMorgan Chase & Co.’s EMBIG index.