IMF Lauds Government’s Commitment

The International Monetary Fund (IMF) has praised the Government’s commitment to sustain fiscal and monetary policy discipline, after Jamaica’s 36-month US$1.65-million precautionary Stand-By Arrangement (SBA) concludes on November 10.

Deputy Managing Director, Tao Zhang, says this is evident in the Administration’s decision to maintain the Economic Programme Oversight Committee (EPOC), to continue monitoring macroeconomic targets and reform commitments.

In a statement on November 4, following the IMF Executive Board’s completion of Jamaica’s sixth and final review under the SBA, Mr. Zhang said maintaining EPOC “will support public accountability until the Fiscal Council becomes fully operational”.

Additionally, he said proposed amendments to the Bank of Jamaica (BOJ) Act will improve the Central Bank’s governance and independence, allowing for greater focus on the institution’s price stability mandate.

“These reforms, together with a well-functioning public bodies’ governance framework and a natural disaster financing policy, will help institutionalise the gains under the Fund-supported programmes,” the Deputy IMF Chief added.

Mr. Zhang noted that successive administrations have demonstrated “exemplary commitment” to economic reforms implemented under two consecutive IMF-supported programmes spanning six and a half years, which also included the US$932-million precursor Extended Fund Facility (EFF).

While acknowledging that these engagements, piloted through Jamaica’s Economic Reform Programme (ERP), were implemented with “considerable sacrifices by the Jamaican people”, he said the resulting out-turns have been significant.

“[They] have institutionalised fiscal discipline and led to substantial reduction in public debt, which is now on track to meet the legislated target of 60 per cent of gross domestic product (GDP) by March 2026. The unemployment rate is at an all time low, inflation is subdued, the financial system is less vulnerable, and international reserves are comfortable,” Mr. Zhang reiterated.

Noting that important gains have also been made in the oversight of financial institutions, the IMF Executive emphasised that the next steps should include enhanced group-wide supervision of financial conglomerates, improving data and analytics, better coordination among financial regulators, an improved legislative framework for the resolution of financial intermediaries, and further strengthening of the Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) framework.

Additionally, Mr. Zhang said supply side reforms are needed to promote inclusive growth and lower poverty, noting that this requires productivity enhancing public investments in human and physical capital, strengthened governance, greater financial inclusion, prioritising measures to combat crime, and “implementing policies that will help build resilience to natural disasters and weather fluctuations”.

“To create fiscal space for these efforts, the Government will have to strengthen fiscal institutions and modernise the compensation framework for public employees,” he said.