- Managing Director of the IMF, Ms. Christine Lagarde, says Jamaica’s ERP is off to a very strong start.
- “All reviews have so far been completed without any shortfall, without any failure, and meeting all the criteria,
- The Prime Minister noted that risks have diminished; domestic growth has picked up; net exports are stronger; inflation is being contained and Jamaica’s international reserves are recovering.
Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, says Jamaica’s Economic Reform Programme (ERP), supported by the IMF, with a four-year US$930 million Extended Fund Facility (EFF), is off to a very strong start.
“All reviews have so far been completed without any shortfall, without any failure, and meeting all the criteria. This is an exceptionally strong record by IMF standards and as a result, the economic outlook is improving,” she said.
Madame Lagarde, who arrived in the island last night (June 26), for a three-day visit, was delivering a statement to the media, following a round of meetings with Prime Minister, the Most Hon. Portia Simpson Miller; Finance and Planning Minister, Dr. the Hon. Peter Phillips and other senior Government officials at Jamaica House, today (June 27).
Jamaica has just completed its fourth review under the programme, which was conducted by the IMF’s Executive Board on June 20. This has brought total disbursements under the Facility to date, to US$414.4 million.
The Managing Director noted that compared to a year ago, growth has picked up; unemployment has declined; inflation has been brought under control; the current account deficit has shown an ongoing improvement; and reserves are beginning to recover.
She said that although there is still a far way to go on some accounts, most of the journey has been completed.
The IMF Head said this is particularly true on the fiscal front, noting that the country is no longer required to implement harsh measures, but must now instead “stay the course.”
She also lauded the Government for implementing key reforms, which had been pending for a long time. These include the tax incentive legislation, approved by Parliament in December 2013, and the fiscal rule approved in March 2014.
Madame Lagarde, however, noted that despite these successes, there are still several other reform measures that must be on the Programme’s “to do” list.
These include: major improvements in tax collection, which must involve significant eradication of tax evasion; modernising of the public sector; and improving the business climate in order to increase foreign direct investments.
The Executive Director said the IMF is aware that adjustment is painful in the short-term, but noted that consistent implementation of these reforms will boost investor confidence and growth.
“Many Jamaicans have seen their wages frozen and are facing higher prices for food and other essentials, but with fundamental reform the foundation for a better economic future can be put in place,” she said.
“We are talking about growth; we are talking about jobs; we are talking about dignity; and integrity,” Madame Lagarde added.
Meanwhile, the Prime Minister said the Managing Director’s visit to the island is more than symbolic; it signifies the Fund’s endorsement of the considerable progress, which has been realised in the first year of Jamaica’s economic transformation programme.
Mrs. Simpson Miller said both the IMF and Jamaican authorities agree that under the economic reform programme, the outlook of the domestic economy has improved.
The Prime Minister noted that risks have diminished; domestic growth has picked up; net exports are stronger; inflation is being contained and Jamaica’s international reserves are recovering.
She said her administration is conscious of the difficulties many Jamaicans are experiencing in the current circumstances, but noted that stimulating growth and employment is at this time the highest priority of both the Government of Jamaica and the IMF.
“In this regard, the Jamaican Government is committed in continuing the process of reform. We are placing specific focus on cementing the gains from fiscal consolidation, while accelerating the pace of domestic growth,” she added.
The Prime Minister said Government is also making further improvements in the business environment and implementing major projects in a timely way to serve as catalysts for growth and development.
“It is also the shared commitment of the Government and the IMF that vital social safety net programmes will be maintained to protect the most vulnerable, even as we press ahead with economic transformation,” said Mrs. Simpson Miller.