Advertisement
JIS News

Story Highlights

  • The body set up to monitor the country’s economic reform programme (ERP) is expressing strong optimism that Jamaica’s economy will continue its positive performance this fiscal year.
  • The Economic Programme Oversight Committee (EPOC), co-chaired by Richard Byles, says several critical factors have contributed to this level of optimism about the future of the economy.
  • Mr. Byles said the Minister also anticipates a positive review of the 8th quarter from the IMF, which visited Jamaica from May 4 to May 12 to conduct their quarterly review of the economy.

The body set up to monitor the country’s economic reform programme (ERP) is expressing strong optimism that Jamaica’s economy will continue its positive performance this fiscal year.

The Economic Programme Oversight Committee (EPOC), co-chaired by Richard Byles, says several critical factors have contributed to this level of optimism about the future of the economy.

Mr. Byles told journalists at the EPOC’s monthly press briefing on June 11, that one major confidence boosting factor is a commitment received from Finance Minister, Dr. the Hon. Peter Phillips, that neither a general election nor the current public sector wage negotiations will be allowed to derail the economic programme.

“He gave us a pledge that he would not vary from his commitment in respect of the four-year International Monetary Fund (IMF) programme and the targets embedded in it,” Mr. Byles noted.

He said the Finance Minister reiterated that commitment when he met with representatives of EPOC on June 9, where last year’s economic performance and the outlook for this year was discussed.

Mr. Byles said the Minister also anticipates a positive review of the 8th quarter from the IMF, which visited Jamaica from May 4 to May 12 to conduct their quarterly review of the economy.

The results of that review are expected to be made available by June 16 and upon approval, Jamaica will receive about US$40 million in Special Drawing Rights (SDRs) from the IMF.

In the meantime, Mr. Byles said the recent upgrades by international rating agencies, Standard & Poor’s (S&P) and Moody’s, are proof that Jamaica’s economy has made “unmistakable progress.”

In May, Moody’s upgraded Jamaica from Caa3 to Caa2 with a positive outlook and in June Standard & Poor’s gave the country an upgrade from B- to B with a stable outlook.

“These are really important developments for the country and the two rating agencies noted that the main reasons that caused the upgrades to happen are the tight fiscal management, the positive economic indicators generally and the doing business reforms that the government has undertaken,” Mr. Byles informed.

Another major factor for the increased optimism is a 4 per cent inflation rate recorded by the Statistical Institute of Jamaica (STATIN) for the last fiscal year, which is the lowest for the country in 48 years.

“I think this is a very notable development… Jamaica finds itself in the low single digit inflation category over the last 12 months and hopefully we can stay in that category going forward,” Mr. Byles said.

“This is important, because devaluation is really linked to the rate of inflation in Jamaica versus the rate in the US. So, if we can keep that spread between US and Jamaican inflation tight, it means that the need for devaluation is considerably reduced,” he explained.

Other notable improvements in the economy, which the EPOC said have contributed to its renewed optimism, are: the growth in the Tourism industry, improvements in the business confidence and competitiveness indices, the country’s current account deficit and a 29 per cent increase recorded by the Jamaica Stock Exchange since January.

Overall, Mr. Byles said Jamaica’s commitment and success so far under the IMF programme is revered by other countries across the world. “When they look at Jamaica’s performance in the last two years they are very impressed. And, what it says is that outsiders looking on Jamaica, relying on objective criteria of measurement, see dramatic improvement,” he noted.