IMF sets June deadline to finalise standby agreement reviews

The International Monetary Fund (IMF) expects to complete the fourth and fifth reviews of the standby agreement with Jamaica by mid-year, according to a statement issued by mission chief Trevor Alleyne.

An IMF technical team wrapped up a 12-day visit to Jamaica on April 1, but Alleyne said discussions are scheduled to continue with the aim of completing the combined fourth and fifth reviews of the stand-by arrangement by the end of June.

Jamaica has a US$1.27 billion borrowing arrangement with the fund, struck February 2010, in support of the country's economic reforms.

The plan aims to reform public finances, bring the deficit and debt under control and eventually balance the budget, while also addressing addressing structural weaknesses to position the country to grow.

Alleyne in his statement issued Monday said the March 21-April 1 mission to Jamaica reviewed recent macroeconomic developments and discussed with the Bruce Golding government the economic-policy initiatives planned for this year, as well as the parameters for the 2011/12 budget to be presented this month.

"Much progress was made on the economic policies and structural reforms to be implemented in FY2011/12, as well as over the medium term to ensure fiscal sustainability and growth," said Alleyne.

He suggested the fund was watching how the administration prioritised its programmes, "within the existing public expenditure envelope", to ensure that medium-term fiscal consolidation and debt-reduction targets are maintained.

"The authorities and staff concur on the need to pursue policies to boost private-sector led activity and to implement public-sector investment projects that reflect national priorities, as well as have a large impact on sustainable job creation and growth."

The IMF team met with Finance Minister Audley Shaw and his Financial Secretary Dr Wesley Hughes, as well as Bank of Jamaica Governor Brian Wynter and senior officials.

business@gleanerjm.com