Jamaica On Course to Pass 9th Consecutive IMF Test

Jamaica is on course to pass its 9^th consecutive review under the Extended Fund Facility (EFF) with the International Monetary Fund (IMF).

This, after successfully surpassing all the key economic targets set by the IMF for the April to June quarter.

A team from the IMF is currently in the island reviewing the country’s performance for the quarter under the four-year EFF.

Speaking with journalists today (Aug.13), Co-Chair of the Economic Programme Oversight Committee (EPOC), Richard Byles, said the indications are that the country will be given another favourable review by the IMF team.

“I think the news that we have received in the last month has been pretty positive on the economic front. The current account has been good, inflation has been within target, Gross Domestic Product (GDP), if a little soft, is at least positive, and of course, the debt to GDP, that reduction is quite significant, (and) the primary balance, we have achieved the target,” Mr. Byles noted.

The EPOC Co-chair informed that for the April to June quarter the country achieved a primary surplus balance of $20.4 billion, which is $3.4 billion more than the target of $17.0 billion set by the IMF.

This, is he said, was mainly due to an improved performance in tax revenues for the quarter, which exceeded the budget by $3.4 billion or 3.7 per cent.

“The main taxes that did well were Company Tax, up by $1.5 billion; Sales Consumption Tax up by $1.6 billion; General Consumption Tax (GCT), (up) $1.1 billion; and tax on interest up by $1.0 billion,” Mr. Byles informed.

He reported that overall, taxes are 16.5 per cent or $13.5 billion better than the same period last year.

Another strong economic performer for the last quarter was the Net International Reserves (NIR), which at the end of June, stood at US$2.1 billion compared to the target of US$1.4 billion.

“Indeed, at July, we know that the (figure) is US$2.4 billion and the target for July is US$1.5 billion , so the NIR is actually outpacing the target and is now nearly a billion more than the target for July,” Mr. Byles noted.

Meanwhile, he informed that the country’s current account recorded a surplus of US$39.4 million for the quarter, which is the first in 10 years.

The improvement, Mr. Byles noted, was due largely to a decline of US$164.8 million in imports of mainly fuel and food.

The current account balance is the difference between Jamaica’s foreign exchange earnings from goods and services, income inflows and remittances, and all its foreign exchange expenditures.

Other positive economic indicators are a 0.5 per cent inflation rate for the month of June, and 0.4 per cent growth in GDP for the January to March quarter, compared to the corresponding period in 2014.