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IMF approves US$40m disbursement for Jamaica

Published:Wednesday | June 17, 2015 | 6:00 AM

The International Monetary Fund (IMF) will disburse another US$40 million to Jamaica following approval of the eighth review by its executive board.

The fund, which signed off on the disbursal without a formal meeting by the board to assess the staff report, says Jamaica's economic programme is on track and remains strong, but says the Government now needs to press ahead with growth projects, as well as the energy programme.

"All performance criteria for the end of March 2015 were met, with the exception of the central government primary balance criterion, which was narrowly missed," the IMF Board stated.

Jamaica is executing a four-year reform programme, the IMF's Extended Fund Facility. Jamaica will receive Special Drawing Rights (SDR) 615.38 million (about US$932 million) of support from the fund over the life of the programme that began in May 2013.

The next disbursement of SDR 28.32 million is equivalent to around US$39.8 million. The eighth review and fund disbursal were approved on a lapse-of-time basis, that is, without a formal meeting of the IMF executive board.

The international lending agency said Jamaica's structural reforms have advanced broadly, in line with the programme.

The IMF noted that continued proactive implementation of the Government's growth strategy will be critical to improve the islands' economic growth and job opportunities.

IMPROVING FINANCIAL INCLUSION

The IMF said in order to improve financial inclusion and support private investment, there must be improved access to credit by small- and medium-sized enterprises; that the shift to a "more accommodative monetary policy stance" by the Bank of Jamaica should also support

the expansion of private credit

and economic growth; and that "continued focus on strengthening the regulatory and supervisory framework of the financial sector remains essential for stability".

Concerning electricity costs, the lending agency added: "To foster sustainably lower electricity costs, scheduled investments in new power plants need to proceed without delay."

The IMF also indicated that Jamaica needs to bolster tax compliance through improvements in revenue administration and press ahead with public-sector reform.

"Improvements in public financial management are also important to raise the efficiency of public spending," it said.

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