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A gradual recovery of the Jamaican economy is projected to commence in the latter part of financial year 2010/11, as the global recession eases and the conditions in the financial markets improve.
“Economic growth is expected to be moderate over the next four years. Headline inflation is programmed to decline gradually over this period, falling below 7.0 per cent per annum by financial year 2013/14,” said Minister of Finance and the Public Service Hon. Audley Shaw on Tuesday (Sept. 29) during the debate on the 2009/10 Supplementary Estimates in the House of Representatives.
He stated that the medium-term macroeconomic programme for the country was predicated on support from the International Monetary Fund (IMF) under a Stand-By agreement and a fiscal programme that seeks to consolidate public sector accounts and stabilise the debt.
Negotiation to finalise an agreement with the IMF is ongoing, with a team from the fund expected in the island in the middle of October, for an agreement to be in place by November.
“It is important to note that this agreement will open further access to funding from other multilateral institutions like the World Bank, Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB) and grant funding from the European Commission,” Mr. Shaw told the House.
The Finance Minister however noted that the main risks to the medium-term programme are external, while stating that a slower than anticipated recovery in the world economy will stymie the pace of recovery in Jamaica.
“In this regard, the weakness in the labour markets in the United States and other industrialised economies is a concern.
“Further, a weakening of the United States dollar and any exogenous shock to the international oil market will have adverse implications for inflation and the balance of payments via the impact on oil prices,” Mr. Shaw said.

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