Senior International Monetary Fund (IMF) Resident Representative in Jamaica, Dr. Gene Leon, says there are positive signs that Jamaica is beginning to rebound from the impact of the global economic recession.
Speaking at the Jamaica Exporters’ Association (JEA) breakfast forum at the Jamaica Pegasus Hotel, New Kingston, today (August 11), Dr. Leon cited the “upward trajectory” in growth, which Jamaica’s economy is currently showing.
Dr. Leon pointed to the economic growth, which has moved from -3 per cent to -1 per cent.
Senior International Monetary Fund (IMF) Resident Representative to Jamaica, Dr. Gene Leon (left), is greeted by Jamaica Exporters’ Association (JEA) President, Vitus Evans, during the JEA’s Breakfast Forum at the Jamaica Pegasus Hotel, New Kingston, today (August 11). Dr. Leon was guest speaker at the function.
While noting the critical input of the Government’s US$2.4 billion 27-month standby agreement with the IMF in the process, Dr. Leon attributed this growth to positive developments in several key sectors, including tourism, which has seen improvement; the bauxite industry, which is beginning to see signs of a resuscitation; and exports, where activities are “beginning to take shape.and pick up.”
“We do know that the world economy is improving. So, if the outside world is beginning to get better, we should expect to see some improvement domestically. This -1 per cent growth is still negative territory, but that is much better than the -3 per cent that we had before. Hopefully, we will cross that zero mark by early next year and, at that point, will be above the line,” he said.
Dr. Leon also pointed to the inflation rate trending down, which he attributed to, among other things, an appreciation of the foreign exchange rate, adding that falling inflation in the global marketplace has also contributed to the reduction. Additionally, the IMF official said the government is “doing a little better” in efforts to achieve primary fiscal balance.
The IMF representative noted that the confidence being displayed in the economy by business interests demonstrated that they are “a little bit more positive” about Jamaica now, than they were at the end of 2009. Similarly, he said, the global economy was also beginning to display confidence in Jamaica, with the country’s success with the Jamaica Debt Exchange (JDX) initiative.
“You are now also willing to hold the government paper for less. Interest rates are going down and if the government is able to pay less on interest, then that leaves the government with a little more money to do something else,” he said.
Noting that the IMF standby agreement, signed in February, is a programme of the Government, negotiated in partnership with the multi-lateral agency, Dr. Leon said the administration should look at the path that will be pursued beyond the facility’s 27-month period.
“What you now need to say is what types of policies, what foundations, what structural reforms you need to put in place, how differently you need to work, so that you can expand and increase capacity. That is important, because you need to have buy-in, you need to have ownership, you need to believe in that which you are agreeing to do. If you get to that stage, chances of you continuing that programme are much higher,” Dr. Leon argued.