Jamaica on Course For 9th Drawdown of Funds From IMF

Jamaica is on course for a ninth drawdown of funds from the International Monetary Fund (IMF).

This is based on the country’s positive performance for the first quarter of the fiscal year under the Extended Fund Facility (EFF), despite the effects of severe drought.

Head of the IMF Mission to Jamaica, Dr. Uma Ramakrishnan, said the country has met all the quantitative targets under the four-year EFF for the April to June quarter.

As a result, the country is expected to receive an additional US$40 million under the EFF, when the IMF board reviews the programme in September.

She was speaking at a press conference to signal the completion of the Fund’s 9^th review of the country’s programme, held on Friday, August 21, at the Ministry’s National Heroes Circle offices.

Dr. Ramakrishnan, who was completing her first mission as Head of the IMF team to Jamaica, said the country’s programme implementation remains strong and structural reforms are broadly on track.

She highlighted reduction in the unemployment rate in April, historical low levels of inflation, significant reductions in the current account deficit and improvements in the country’s international reserves, as positive developments in the economy.

“A gradual economic recovery is underway, growth outlook is improving although the drought is hampering agricultural recovery for the second year in a row,” Dr. Ramakrishnan noted.

She informed that the IMF is now projecting a 1.4 percent growth for the 2015/16 fiscal year.

Finance and Planning Minister, Hon. Dr. Peter Phillips, said the positive assessment from the review team, shows that the country continues to demonstrate positive macroeconomic performance despite the impact of the drought on growth.

“What the country has been able to achieve in a relatively short period of time is significant and particularly if considered in relation to where we are coming from,” Dr. Phillips said.

The Finance Minister noted the significant work being done to implement tax, labour and financial sector reforms, and public sector transformation.

He noted that that a number of initiatives are also being undertaken to help the country achieve greater levels of growth.

“The progress being made in agriculture, the energy economy, business process outsourcing (PBO), and the tourism sectors will have an even sharper positive impact on the Jamaican economy over time, as development proceeds in these areas,” he noted.

Dr. Phillips also pointed to work being done by the Development Bank of Jamaica to increase levels of investments and recent efforts by the Government to divest some entities, as developments that should have a positive impact on the economy.

He reiterated the Government’s commitment to the economic reform programme and noted that his Ministry will not engage in any “reckless unlocking of spending simply to satisfy a set of short term, calls and needs.”