Jamaica Continues Strong Performance under IMF Programme

Jamaica continues to perform strongly and remains on track with targets under the four-year Extended Fund Facility (EFF) with the International Monetary Fund (IMF).

Finance and Planning Minister, Hon. Dr. Peter Phillips, said the review of the December 2014 quarter shows that there has been significant progress in the country’s macroeconomic status.

“Our debt continues to trend down, there has been substantial improvement in our inflation outturn (estimated at 5 per cent for the fiscal year), there has been substantial improvement on the current accounts of our balance of payment, employment continues to increase and unemployment continues to decrease,” Dr. Phillips noted.

He was speaking at a press conference today (February 25), to announce the successful completion of the 7th review by an IMF mission team, which visited Jamaica from February 16 to 25.

Jamaica is set to receive 28.32 million of Special Drawing Rights (SDR) or US$40 million from the IMF in March, when the board of the fund approves the 7th review of Jamaica’s performance under the EFF.

IMF Mission Chief to Jamaica, Dr. Jan Kees Martijn, said the country’s external position is strengthening and all quantitative targets for December 2014 under the programme were met although the target on tax revenues was narrowly missed.

He said discussions with the Government included recommendations to maintain the strong fiscal discipline and implement reforms that require society-wide sacrifices, but are expected to yield growth and employment over the medium-term.

“The fund mission reached preliminary understandings with the authorities on economic policies, that will accelerate the pace of reforms so as to further unlock growth and bolster financial stability,” Dr. Martjin said.

“This fiscal discipline, impressive by international standards, remains key to lowering Jamaica’s still very high public debt ratio,” he further noted.

He added that sustaining this fiscal position over the medium-term will require further steps to strengthen revenue administration, broaden the tax base and improve public sector efficiency.

Meanwhile, Dr. Phillips said the matter of how to sustain the growth benefits experienced so far under the Economic Reform Programme (ERP), “is to be kept under discussion between both sides going forward.”

“This is to see not only how we can ensure the greatest levels of growth commensurate with our other targets, but more so, how we lock in this growth for the longer-term, how we ensure that it is broad-based, how we ensure that is sustained and how do we ensure that it is maximized,” Dr. Phillips said.

He pointed out that Jamaica’s performance under the ERP is being positively received by the international community and it is important that the gains made are sustained overtime.

“When all is said and done, the biggest impact on the growth capacities of the country will be the reduction of the debt overall and the continuation or completion of the structural reform measures, which will unlock the investment capacities of both the local and foreign investor community,” Dr. Phillips said.