Economic Conditions Have Never Been Better

Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says the Government is pleased with Jamaica’s successful completion of the fourth International Monetary Fund (IMF) Precautionary Stand-By Arrangement (PSBA) Review.

This, following the IMF Executive Board’s consideration and approval of the Review at its meeting on November 5.

Consequent on Jamaica passing the fourth PSBA Review, an additional US$226 million is now available to the Government, if needed, which brings the total credit accessible under the PSBA to US$1.2 billion.

In a statement, IMF Board Acting Chair and Deputy Managing Director, Tao Zhang, noted the Government’s continued impressive track record under the PSBA.

This, he pointed out, is primarily evidenced by sustained macroeconomic stability, reduced public debt, and improving social and unemployment indicators.

Speaking in an interview with JIS News, Dr. Clarke said the Review’s outcome suggests that Jamaica’s economic conditions “have never been better”.

He cited among the supporting indicators, first-quarter growth of 2.2 per cent for 2018/19, which, he noted, is the highest for that period in 10 years; further reduction in unemployment to 8.4 per cent as at July 2018, the lowest in the country’s history, according to the Statistical Institute of Jamaica (STATIN); and reduction in the poverty rate, which fell to 17.1 per cent in 2016, the lowest in 10 years.

The Minister further noted the fall in inflation to 3.2 per cent at the end of July 2018; a 16 per cent increase in private-sector credit, particularly to unbanked stakeholders; and a 25 per cent expansion in mortgages issued by the National Housing Trust (NHT) and other financial institutions.

“So, we are seeing individuals and businesses taking advantage of what is an unprecedented time in Jamaica’s economic history,” he said.

He noted the need for further expansion of credit to the private sector in order to accelerate growth, and for more private-sector stakeholders to take advantage of the opportunities available to them to boost investments in order to sustain the cycle of growth “and even push it to higher heights”.

Dr. Clarke told JIS News that the Administration remains focused on ensuring that Jamaica continues to be fiscally responsible, and pursues all avenues and strategies for attaining higher levels of sustainable growth.

This is consistent with the IMF’s position of the need to spur higher growth; reduce and maintain the public-sector wage bill at nine per cent of gross domestic product, and pursue modernisation of the civil service; and further strengthen the financial sector.

“This is a Government that aspires to do better and sets goals that are beyond what is considered immediately possible… because we believe that all of us, as Jamaicans, are an aspirational people,” Dr. Clarke said.

Regarding the additional US$226 million now available to the country with the passing of the fourth PSBA Review, the Minister said that “this puts us in a very strong position”, in the event Jamaica needs additional funding support to counter domestic or exogenous shocks.

The Precautionary Stand-By Arrangement, which succeeded the IMF’s Extended Fund Facility (EFF) in 2016, is slated to conclude in October 2019.