A team from the International Monetary Fund, led by Mr. Luis Breuer, completed a 2-week visit to Jamaica on March 21, 2012.
In the course of conducting a formal assessment of the state of the Jamaican economy, the team received a full update on the financial position of the public sector as well as recent data and trends in the economy.
During their visit, the team held discussions with the Prime Minister, Ministers and officials in a wide range of Ministries and public agencies. The Mission also engaged leaders and groups in the private sector, including bankers, business persons and trade unions. Meetings with the sectoral groups were conducted in Kingston and Montego Bay.
On Wednesday, March 21st the IMF team had a closing meeting with the Minister of Finance and Planning, officials of the Ministry and associated agencies including the Bank of Jamaica and the Planning Institute of Jamaica, to summarize their findings. Both sides concurred that strong policy action was needed to place Jamaica’s debt ratios firmly on a downward trajectory and to address the challenge of slow growth. It was further agreed that there was a need to confront these issues simultaneously by strengthening public finances through comprehensive tax reform, tighter control of expenditure and a greater focus on enhancing the overall competitiveness of the Jamaican economy.
Both sides also agreed that there was a particular need to enhance social protection for the most vulnerable while these changes were being implemented.
The Fund expressed a willingness to work with Jamaica in formulating a medium term strategy to overcome these challenges, including providing technical advice. The Government is formulating such a strategy, the first phase of which will be implemented through the fiscal budget for FY2012/13. Tax reform -both to ensure revenue effectiveness and to influence real production -and the stabilization of the debt indicators will be key objectives in the forthcoming budget.
Discussions with the IMF on the elements of a programme of longer term support for the Government’s medium term framework are set to continue in April. The Government has committed to keep the country fully briefed on the terms of any such engagement.