JIS News

Prime Minister the Hon. Bruce Golding has indicated that there is a possibility of the International Monetary Fund (IMF) providing Jamaica with budget support, as part of a new agreement with the multilateral lending agency.
Mr. Golding said that he has been informed by the Jamaican team currently in Washington negotiating with the IMF, that the Fund is giving consideration to the suggestion.
“They never lend you money for your budget, they lend you money for your balance of payments. But, I got a call from Governor (of the Bank of Jamaica Hon. Derick) Latibeaudiere today, to say that the IMF has been considering, for sometime, providing some amount of support for budgetary expenditure, and it appears that they are on the verge of taking a decision, and it is possible that they may give us some assistance there,” the Prime Minister said.
He was speaking to a large audience attending his seventh Town Hall meeting, at the St. Gabriel’s Church, May Pen, Clarendon last night. The meetings are used to explain Government policies.
Mr. Golding said that, if this goes Jamaica’s way, it would greatly assist the Government in meeting internal financing challenges, which would become the main dangers after settlement of the financing of external account.
He said that the Government was forced to seek the IMF’s support for its external account, mainly because of a 50% fall in exports, including a reduction in bauxite/alumina earnings from $1.2 billion to under $300 million this year, and a 16% reduction in remittances from Jamaicans abroad, or $350 million less than last year.
However, the Prime Minister admitted that there have been some improvements in the external account in recent weeks, with the Government accessing the US$330 million in Special Drawing Rights (SDRs) available from the IMF, as well as funds made available by the European Union (EU), which have helped to boost the Net International Reserves (NIR) from the US$1.6 billion, it had fallen to earlier this year, to almost US$ 2 billion.
“That is comfortable, and we will draw on that money as we need it, in order to meet our external payments,” the Prime Minister advised.
However, he said that with $127 billion needed to meet public sector salaries, and an additional $335 billion for debt servicing, the Government will be left with only approximately $100 billion of the $561 billion 2009/10 budget to meet all other needs, including for health, education, road rehabilitation and national security.
Other speakers at the meeting included: Minister of Labour and Social Security, Hon. Pearnel Charles; Minister of Transport and Works, Hon. Mike Henry; Minister of Health, Hon. Rudyard Spencer; Minister of Energy and Mining, Hon. James Robertson; and His Worship the Mayor of May Pen, Councillor Milton Brown.

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