Sat | Aug 19, 2017

Jamaica to benefit from US$70m World Bank loan

Published:Friday | June 9, 2017 | 6:54 PM
The Ministry of Finance offices located at National Heroes Circle in Kingston.

The World Bank has approved a US$70 million loan to support measures being pursued by the government to improve Jamaica's investment climate and sustain fiscal and public financial management.

Finance Minister Audley Shaw says Jamaica has exercised strong fiscal discipline under the standby funding arrangement with the International Monetary Fund (IMF) and the allocation from the World Bank will further improve those efforts to boost the country’s fiscal management and competitiveness.

Shaw says the government’s tight fiscal policy and commitment to sound macroeconomic policies have also served to inspire investor confidence, which he says now stands at an all-time high.

The finance minister says this has also led to stronger net foreign direct investment inflows and a steady increase in employment.

The loan will be used specifically to fund measures to increase economic competitiveness in the newly created special economic zones to make them more attractive to investors, by reducing customs clearance times, diversifying sources of electricity generation, and upgrading building and construction standards.

The World Bank notes that the reforms adopted by the Jamaican government since 2013 have succeeded in stabilising the economy and reducing debt.

The multilateral lending agency says the Jamaican economy is showing signs of modest growth acceleration as Gross Domestic Product (GDP) grew by 1.4 per cent in 2016, up from 1.0 per cent in 2015 and 0.7 per cent in 2014.

It notes that employment also improved and inflation dropped to the historically low level of 2.3 per cent in 2016.

The multilateral bank mentioned that the 2016-2017 Global Competitiveness index also ranks Jamaica 75th out of 138 countries, a significant improvement from 86th in 2015.

The World Bank attributes the positive out turns to Jamaica’s sustained and strong commitment to implementing an ambitious economic reform program.

Importantly, the World Bank notes that the island’s economic outlook remains favourable and is expected to continue to improve with the government staying the course of the reform programme.