PRESIDENT OF the Private Sector Organisation of Jamaica Christopher Zacca is painting a bleak picture of what Jamaica faces if it does not secure an agreement with the International Monetary Fund (IMF).
Speaking during a Rotary Club of St Andrew luncheon on Tuesday, Zacca opined that among the most immediate impacts would be a dramatic fall in consumer and business confidence.
"There would be significant deterioration in international and local financial sentiment and continued delay in the disbursement of funds, or even worse, a significant loss of financing from other international development partners," he said, noting that additional disbursements were linked to the finalisation of an IMF agreement.
Zacca said he felt a lack of these funds would compromise the Government's reform agenda and infrastructure programme.
He warned that bleak market sentiment would lead to downgrades from ratings agencies.
"The fall in market confidence and in sovereign ratings, combined with the loss of multilateral financing, would lead to a further reduction in the Net International Reserves," he said, arguing it would trigger a rapid depreciation of the Jamaican dollar, accompanied by higher inflation.
Other bleak outlooks included a 'drying up' of loan growth and a rising of non-performing loans, with financial institutions suffering significant losses. Ultimately, Zacca said, the Government would be forced to implement 'corrective measures', leading to more austerity and taxes.
"All the preceding conditions mentioned above will lead to further reduction in domestic demand, higher unemployment levels and higher poverty rates. That is a downward spiral of negative consequences for our country," he said.
Zacca said an IMF deal was vital as it would facilitate the implementation of policies and strategies urgently needed for the modernisation of the country and for putting it on a path for long-term sustainable economic growth and development.
He called for the coming together of what he labelled 'Team Jamaica' - comprising the Government, Opposition, public and private sectors, unions and civil society.
In his vision, all would work together to share the short-term pain of securing an IMF agreement.
"We are all part of the same team. It's not us and the IMF versus the Government. It is all of Jamaica working to ensure that the economic policy wrongs of the past are righted," he said.