A staff-level team from the International Monetary Fund (IMF) is urging the Jamaican Government to be resolute in implementing its strategy to increase growth by improving the business environment and pursuing strategic investments.
At the same time, the mission, which conducted the first quarterly review under the four-year extended fund facility (EFF) during the past week, reported yesterday that Jamaica's fiscal performance for the last financial year and the first quarter of the current year outperformed projections despite declines in several key areas.
"Overall policy implementation, thus far, under the program(me) has been strong, and structural reforms are progressing. All quantitative performance targets and indicative targets for end-June were met," the IMF's mission chief for Jamaica, Jan Kees Martijn, said in a media release.
ECONOMY ACTIVITY CONTRACTED
The team noted that economic activity is estimated to have contracted by 0.7 per cent in fiscal year 2012-2013, with a further decline from April to June 2013.
It also noted that the reported unemployment rate increased to 16.3 per cent at the end of April, and that inflation reached 9.7 per cent in July.
However, net international reserves increased to just over US$1 billion by the end of June, although reserves have declined since then, in line with the seasonal pattern.
Martijn said while recent economic developments mostly confirmed the challenges of the Jamaican economy, the country has outper-formed projections, with the central government primary surplus improving to 5.4 per cent of gross domestic product.
The assessment by the IMF team is subject to approval by the IMF's management and executive board.
Implementation of the Govern-ment's strategy to increase growth by improving the business environment is among the key elements of understandings reached between the IMF team and the Government on an updated or supplementary memorandum of economic and financial policies spelling out the next steps to be taken.
"Provided that performance remains strong, board consideration of the first review of Jamaica's IMF-supported program(me) under the EFF could take place late September. Upon approval, SDR19.97 million (about US$30 million) would be made available to Jamaica," the IMF release said.