JIS News

The Government has negotiated a liquidity line with the Inter-American Development Bank (IDB), that will be made available to the commercial banks, for on-lending to the productive sectors, where lines of credit have been cancelled.
Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Donald Wehby, who made the disclosure in the Senate on November 14, said the facility was approved by the IDB on November 5, and the Government has submitted a formal request for access.
“We expect to hear from them shortly,” Senator Wehby said, during his contribution to the State of the Nation Debate.
The Minister also informed that a United States (US) dollar Government of Jamaica indexed bond, was issued on November 14, thereby “enabling persons to hedge their risk of devaluation, without actually having to buy US dollar.”
Meanwhile, Senator Wehby said that negotiations with three major international financial institutions, namely the World Bank, IDB and the Caribbean Development Bank, is currently on-going, regarding a policy based loan, which would more than cover the funding requirements needed for the remainder of the current fiscal year, and also the external payments for the following two years.
“I made a presentation to them about a rigorous reform programme, aimed at Jamaica’s fiscal and debt sustainability. We received a lot of positive feedback and are moving forward with that programme. We expect to conclude the negotiations and ascertain the necessary approvals by the end of the calendar year,” Senator Wehby said.
On another matter, Senator Wehby said that the Gross Domestic Product (GDP) for 2008 is now projected to be approximately 1 per cent, compared to the initial programme of 3.0 per cent.
“These numbers are currently being reviewed by the technical team,” he pointed out.
He also informed that there is a projected increase of approximately six per cent in remittance flows, over the previous calendar year.
“Currently, this sector accounts for just over US$2 billion annually, and in discussions with the market, the estimated growth rate of remittances is between six and seven per cent. Flows totalled US$1.5 billion for the first nine months of the year, 8.8 per cent higher than in the same period last year,” Senator Wehby said.
He also noted that as commodity prices have started to fall, so too has the monthly headline inflation rate. Senator Wehby said that for July, the headline inflation was 2.8 per cent, for August it was 1.2 per cent, for September it was 0.6 per cent and for October, it is also expected to be below one per cent.
“For the financial year 2008/09, inflation is projected to be between 15 and 17 per cent,” the Minister said.