Government to Build on Good Standing with Creditors

Photo: Mark Bell Finance and the Public Service Minister, Hon. Audley Shaw.

Story Highlights

  • Finance and the Public Service Minister, Hon. Audley Shaw, says the Government plans to build on Jamaica’s good standing with its international creditors, as a result of notable improvements in several areas of the economy.
  • Among these are stabilisation of the macroeconomic environment, debt reduction, fiscal discipline, and maintaining inflation within the four to six per cent range, all of which are targets under the country’s Precautionary Stand-By Arrangement (PSBA) with the International Monetary Fund (IMF).
  • He noted that this more favourable view was evidenced in the outcome of the Government’s bold and successful entry into the international bond market last August, to raise US$300 million for budgetary support.

Finance and the Public Service Minister, Hon. Audley Shaw, says the Government plans to build on Jamaica’s good standing with its international creditors, as a result of notable improvements in several areas of the economy.

Among these are stabilisation of the macroeconomic environment, debt reduction, fiscal discipline, and maintaining inflation within the four to six per cent range, all of which are targets under the country’s Precautionary Stand-By Arrangement (PSBA) with the International Monetary Fund (IMF).

The Minister was speaking at Mayberry Investments Limited’s monthly Investor Forum, held recently at The Knutsford Court Hotel in New Kingston.

Mr. Shaw said consequent on these notable economic out-turns, coupled with others on the “cusp of fruition”, Jamaica has been repositioned in a “whole new light” in the eyes of its creditors.

He noted that this more favourable view was evidenced in the outcome of the Government’s bold and successful entry into the international bond market last August, to raise US$300 million for budgetary support.

The Minister reiterated that the bond offer was oversubscribed 10 times, with orders amounting to US$3 billion.

Mr. Shaw said with this “massive” oversubscription at their disposal, the Government opted to take US$1 billion, “and simultaneously used the opportunity to redeem more expensive local and international debt”.

“Yields for the US$1 billion that we borrowed were five per cent on bonds due in 2028, and 6.5 per cent (for) those due in 2045. These were historical lows in the international capital markets for Jamaica,” he indicated.

Mr. Shaw said the economic gains recorded also enabled Jamaica to “hold strain” under the PSBA, emphasising that this was “no simple feat”.

“We passed both 2017 biannual reviews that were conducted by an IMF Mission in March and September,” he noted.

The Minister also highlighted IMF Managing Director, Christine Lagarde’s commendation of the Government’s efforts in achieving macroeconomic stability and fiscal discipline, and further debt reduction, given during her two-day working visit to Jamaica last November.

Mr. Shaw said the Administration intends to build on this and the international creditors’ favourable view of Jamaica. “What I can say with some considerable certainty is that we are going to continue to grow the economy,” the Minister said.

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