Advisors Warn Of Economy 'Overheating'

Monday, 19 April 2021 08:45

The Treasury Minister's been told the government should take its time balancing the budget, and aim to do it by 2025 rather than the previous goal of 2023.

The government's financial advisors, the Fiscal Policy Panel, has written to Deputy Susie Pinel to warn against investing in too many infrastructure projects too quickly - saying it could lead to the economy 'overheating'.

Hundreds of millions of pounds worth of construction projects across the government and States-owned companies have been planned to kick-start the island's economy.

The FPP has warned that undertaking too many large-scale capital projects at once would 'put pressure on resources' in the construction sector, and spending so much so quickly could lead to the economy 'overheating'.

The panel says it's important to plan how the planned infrastructure projects - like the new hospital and redevelopment of Fort Regent - could be completed without creating constraints on the construction industry - or the wider island economy.

It's economic forecast has been downgraded, with the FPP saying it's more appropriate to close the defecit slowly, balancing the budget by 2025.

Deputy Pinel says Ministers will take the panel's advice on board:

"I thank the Fiscal Policy Panel for their detailed report, assumptions and advice.

"The FPP’s forecasts are useful to the Government as we continue to make decisions about our wellbeing and economy in the recovery from COVID-19. I will review this advice with my colleagues in the Council of Ministers as we continue to plan for Jersey’s recovery.”