Recovery under way - IMF says Jamaica on track

Published: Sunday | December 29, 2013 Comments 0
Minister of Finance and Planning, Dr Peter Phillips, and Prime Minister Portia Simpson Miller. - File
Minister of Finance and Planning, Dr Peter Phillips, and Prime Minister Portia Simpson Miller. - File

Arthur Hall, Senior News Reporter

The International Monetary Fund (IMF) has given Jamaica high marks for its performance during the second review period since the country entered a new borrowing arrangement in May.

In its review released late last Friday, the IMF said Jamaica's macroeconomic developments are broadly in line with programme projections.

"(The) programme performance is on track, in spite of the difficult economic environment," said the IMF in a seeming stamp of approval to the work of Finance Minister Dr Peter Phillips and the Portia Simpson Miller led-administration.

"There are signs of a gradual recovery from the effects of the global financial crisis and Hurricane Sandy," added the Fund.

That is a view shared by Phillips, who has been the point man on Jamaica's performance.

"I think the review highlights our performance, although it notes that there are still challenges," Phillips told The Sunday Gleaner.

"Overall, I'm pleased that there is a return to growth, and while we are now in calmer waters, we are not yet through our difficulties," added Phillips.

The IMF has said Jamaica's real GDP growth for the 2013-14 fiscal year is projected at just under one per cent, supported by improved activity in the tourism, mining, and agricultural sectors. This is unchanged from previous projections.

The Fund noted that "Inflation has increased due to the depreciation of the exchange rate, as well as higher administered prices in the context of the recent fiscal package. International reserves are in line with programme requirements, but remain low."

According to the IMF, the execution of the 2013-14 Budget has remained broadly on track.

"Strong implementation of the programme would lay the foundation for sustained economic growth," projected the Fund.

The IMF further reported that Jamaica met all end-of-September quantitative performance criteria and structural benchmarks.

"The macroeconomic outlook and financing scenario remain broadly in line with earlier projections."

The Government was also commended for pressing ahead with the next round of reforms, including strengthening the fiscal policy framework, reforming the securities dealers sector, and enhancing public financial management.

However, the IMF warned that the risk to the programme remains high.

The major risk factors were listed as "possible external shocks, weak confidence and anaemic external demand that could hamper the growth recovery, shortfalls in budget financing and revenue collection, and policy slippages".

But Phillips is adamant that there will be no policy slippages as the Government is committed to the course.

"I have always said this is a Jamaica programme, not an IMF programme, and we are fully committed," said Phillips.

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