Jamaica Achieves all Targets in IMF Review

Jamaica is virtually assured of an additional US$180 million from the International Monetary Fund (IMF), if needed, by meeting all quantitative targets and structural benchmarks in the second review.

The review was conducted under its Precautionary Stand-by Arrangement (PSBA) with the multilateral institution for the period up to June 30, 2017.

Head of the IMF’s Mission to Jamaica, which conducted the review over the past two weeks, Dr. Uma Ramakrishnan, says the provision, subject to the IMF Executive Board’s approval at its meeting scheduled for October, will bring the total amount of funds that Jamaica can access to approximately US$790 million.

She was speaking at a joint Government of Jamaica (GOJ)/IMF press conference at the Office of the Prime Minister on September 14, where details of the review were outlined.

Dr. Ramakrishnan noted that Jamaica’s economic programme continues to deliver strong results, which have been fuelling significant business and consumer confidence and increased job creation.

Additionally, she said the central Government’s primary balance surplus has exceeded the programmed target by a “healthy margin”, due mainly to buoyant corporate income tax.

The Mission Chief further said that non-borrowed reserves have been overperforming, adding that inflation is anchored in the Bank of Jamaica’s inflation target range of four to six per cent.

Dr. Ramakrishnan said despite the impact of adverse weather conditions experienced earlier this year, the economy continues to rebound.

She highlighted strong performances recorded in tourism, construction and manufacturing, as also further reduction in the unemployment rate to a seven-year low 12.2 per cent, coupled with a sustained expansion in the labour force, as positive out-turns in this regard.

Dr. Ramakrishnan reiterated that growth for the 2017/18 fiscal year is projected to be approximately 1.6 per cent. This, she noted, is slightly lower than the forecast that was given when the initial review was conducted earlier this year, and was due primarily to the impact of the adverse weather conditions.

“But in the medium term, we do expect growth to be about 2.5 to three per cent as Jamaica reaps the dividends from higher investment and higher productivity from all of the reforms that are currently ongoing,” she added.

In his remarks, Prime Minister, the Most Hon. Andrew Holness, said Jamaica, with support from the IMF and other multilateral partners, has demonstrated “incredible and unbroken resolve” in its economic reform agenda.

“We have many successes of which we can be proud; however, much remains to be done. Now is the time to recommit ourselves to the task at hand… of ensuring that we secure for future generations a Jamaica that is economically independent and can, one day, be a net contributor to the international community,” he said.

For his part, Finance and the Public Service Minister, Hon. Audley Shaw, said the Government remained “firmly committed” to meeting and surpassing all targets under the PSBA, including debt reduction “and the ambitious reform agenda we have laid out”.

The just-concluded review comes one month shy of a year since the three-year PSBA came into effect, replacing the Extended Fund Facility, which spanned four years.