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  • Jamaica is on course for a ninth drawdown from the International Monetary Fund (IMF), totalling US$40 million, based on the country’s performance during the January to March quarter, despite recording a shortfall in the 7.5 per cent primary surplus target for fiscal year 2014/15.
  • Set a target of $121.3 billion for the end of March 2015, Jamaica registered $117.2 billion, a shortfall of $4.1 billion.
  • This has been attributed to lower than projected revenue inflows for the period, reflective of the impact of drought, among other factors.

Jamaica is on course for a ninth drawdown from the International Monetary Fund (IMF), totalling US$40 million, based on the country’s performance during the January to March quarter, despite recording a shortfall in the 7.5 per cent primary surplus target for fiscal year 2014/15.

Set a target of $121.3 billion for the end of March 2015, Jamaica registered $117.2 billion, a shortfall of $4.1 billion.

This has been attributed to lower than projected revenue inflows for the period, reflective of the impact of drought, among other factors.

However, new Chief of the IMF’s Staff Mission Team to Jamaica, Dr. Uma Ramakrishnan, says the primary surplus shortfall is not a worrying concern for the institution, as it is not expected to affect Jamaica’s four-year Extended Fund Facility (EFF) programme.

She gave this assurance during Tuesday’s (May 12) media briefing at the Ministry of Finance and Planning in Kingston, where the outcome of Jamaica’s eighth review for the January to March quarter, was announced.

Dr. Ramakrishnan described the missed revenue performance target as a “minor deviation” occurring in the programme’s implementation, while assuring that “all (other) quantitative targets, to the end of March 2015, were met.”

“What is really critical for us (is maintaining) the central focus of the programme, which is the Government’s commitment to achieving the 7.5 per cent primary surplus for the year,” she noted.

The IMF Mission Chief said once the “critical” programme goals remain intact, “which, we think, is the case for Jamaica, we have routine procedures that we follow to go ahead with the completion of the review without delay (and) on time, to keep things on schedule and on track.”

In this regard, Dr. Ramakrishnan said the IMF Executive Board is “tentatively” scheduled to deliberate on the Mission Team’s review, conducted between May 6 and 13, in June.

Meanwhile, Finance and Planning Minister, Dr. the Hon. Peter Phillips, reaffirmed the Government’s commitment to a maintaining a high primary surplus target, noting that “Jamaica has achieved the 7.5 per cent of GDP outturn…since the inception of the programme.”

Attainment of this minimum target, he pointed out, “underpins” the primary objective of Jamaica’s Economic Reform Programme (ERP), “which is to reduce the significant level of debt build-up over many years.”

“It is, therefore, important to note that the fiscal deficit is $3.6 billion, better than targeted, and this outturn supports our debt reduction objective,” he added.

Noting that the EFF is midway into its implementation, Dr. Phillips said that Jamaica’s performance under the programme, to date, has been “exemplary,” adding that the administration’s efforts are “paying off” as the economy is “showing positive signs of recovery.”

Notable among these, he outlined, are: a 2014/15 fiscal year inflation rate of four per cent, “the lowest in 48 years,” relative to 8.3 per cent for 2013/14; a decline in the current account deficit of the balance of payments from 13.4 per cent of GDP in 2011/12, to 5.9 per cent in 2014/15, with further narrowing down to 2.4 per cent, anticipated for 2015/16.

Additionally, the Finance Minister said the Net International Reserves (NIR) stood at approximately US$2.4 billion at the end of April 2015, with the stock of gross reserves representing over 20 weeks of projected import of goods and service; while the debt to GDP ratio declined from 140.7 per cent at the end of fiscal year 2013/14, to 138.5 per cent at the end of 2015/15.

He also reiterated that significant reforms undertaken have served to improve Jamaica’s business environment.

Regarding the quarterly reviews, Dr. Phillips said it was his understanding that IMF Executive Board’s passage of seven of these without a waiver request, as Jamaica has done, “is as rare as is passing eight reviews with a single waiver.”

“The Government remains unwavering in its commitment to the economic reform programme, which will result in increased job creation and economic growth,” Dr. Phillips emphasised.