Thu | Sep 21, 2017

Jamaica passes ninth IMF test

Published:Wednesday | September 23, 2015 | 9:50 PM

The International Monetary Fund (IMF) has issued a statement announcing that Jamaica has passed its ninth consecutive test under the Extended Fund Facility.

This means that Jamaica can now draw down about US$39.7 million or about $472 million.

"The authorities remain firmly committed to the economic program supported by the Extended Fund Facility," said Min Zhu, the IMF Deputy Managing Director and Acting Chair

He said programme performance is on track and structural reforms have progressed broadly on schedule.

“Macroeconomic fundamentals continue to strengthen. Inflation is at a historical low and the current account is improving, aided by declining oil prices, Min said.

He said the recent upgrade in the credit ratings followed by the large international bond placement signalled improved investor confidence in Jamaica’s reform programme.

However Min said growth remains weak and unemployment needs to further decrease.

"Sustained efforts in structural reforms, including by reducing energy costs, improving the business environment, and developing critical infrastructure, should help boost investment and growth," he said.

In the meantime, the IMF deputy said the recent PetroCaribe debt buyback has lowered the ratio of public debt to Gross Domestic Product, which the ongoing fiscal consolidation should maintain firmly on a downward path.

Nonetheless, the IMF says it is essential to move forward with public sector reforms and public financial management, to improve the efficiency of government services.

"It is also important to continue strengthening fiscal revenue by reforming customs and tax administration and broadening the tax base," the IMF said.

It added: "Recent steps to loosen the monetary stance should support credit creation, while maintaining price stability."