- The Executive Board of the IMF on Wednesday, March 19, completed the third review of Jamaica’s economic performance.
- A release from the IMF said this review will enable the disbursement of an amount equivalent to US$71.4 million.
- Jamaica’s programme implementation under the EFF has remained strong.
The Executive Board of the International Monetary Fund (IMF) on Wednesday, March 19, completed the third review of Jamaica’s economic performance under the Extended Fund Facility (EFF) arrangement.
A release from the IMF said this review will enable the disbursement of an amount equivalent to SDR 45.9 million (US$71.4 million), which would bring total disbursements under the arrangement to the equivalent of SDR 222.6 million (US$345.8 million).
The Executive Board approved the EFF arrangement for four years and a total of SDR 615.38 million (US$948.1 million), the equivalent of 225 per cent of Jamaica’s quota in the IMF, on May 1, 2013.
Following the Executive Board’s review, Deputy Managing Director and Acting Chair of the Board, Mr. Nayouki Shinohara, said Jamaica’s programme implementation under the EFF has remained strong.
“The current account has improved markedly and international reserves have increased in line with programme requirements. The execution of the 2013/14 budget has remained broadly on track. However, the economic recovery is fragile. Sustaining the reform momentum and continued implementation of sound macroeconomic policies is necessary to address the persisting challenges and risks,” he said.
“The recent improvement in competitiveness and the steadfast implementation of the macroeconomic programme are expected to spur investor confidence. However, private investment needs to be supported also by determined actions to reduce red tape and bureaucracy, while the strengthening of social protection programmes should help make growth more inclusive,” the Deputy Managing Director added.
He said that Government’s plan to restrain expenditure and to meet the 2013/14 budget targets is commendable and that going forward, policies should rely more on curtailing current spending, while protecting capital expenditure.
“In the event of a revenue shortfall, additional contingency measures will be needed. Strengthening fiscal management, including an effective fiscal rule, will help entrench fiscal discipline and commitment to debt reduction. While important progress has been made to improve the tax system, revenue administration, public sector modernization, and public financial management reforms should remain a priority,” the Deputy Managing Director said.
He suggested that monetary policy should continue to focus on reducing inflation and rebuilding net international reserves. “In addition, it will be important to remain vigilant to market conditions to avoid liquidity constraints. Continued in-depth monitoring of the financial system is also necessary going forward. The ongoing reform of the securities dealers sector should help underpin financial stability,” he added.