IMF demands Jamaica take concrete steps to cut wage bill
The International Monetary Fund (IMF), is demanding that Jamaica undertake concrete efforts to cut its wage bill, the latest sign of the fund's apparent impatience with the pace of government action.
Today's demand comes almost three months after a warning from the Fund, which many, including the Opposition, have taken to mean the possibility of massive job cuts.
This morning, the IMF's deputy managing director, Min Zhu, announced that Jamaica passed it's 10th consecutive test under the loan program.
However, he noted that fiscal sustainability requires continued reduction in the government's wage bill while safeguarding revenues.
He asserted that to do this, concrete efforts are needed to modernise the public sector and improve the efficiency of the public sector.
He said while important achievements have been made, growth remains weak and unemployment is still high.
In September, the IMF said Jamaica would be limited to undesirable policy options if it is to achieve next year's target of cutting public sector wages to nine per cent of gross domestic product (GDP) which is the total value of goods and services produced.
The wage bill for the current 2015/2016 financial year is projected at 10.1 per cent with public sector wage talks still incomplete.
The government mainly through finance minister, Dr Peter Phillips has played down the concerns that there will be massive job cuts.
The IMF has said the costs to the economy for failing to contain the wage bill to the nine per cent of GDP are likely to be high.