Tue | Feb 18, 2020

Jamaica to focus on growth agenda after third IMF test

Published:Friday | February 14, 2014 | 12:00 AM
Dr Peter Phillips, minister of finance, planning, and public service, giving an overview of Jamaica's performance in the third quarter of the IMF programme, at the joint Ministry of Finance/IMF press conference at National Heroes Circle, Kingston, on Thursday, February 13. Beside Phillips is IMF Mission Chief Dr Jan Kees Martijn. Jermaine Barnaby/Photographer

McPherse Thompson, Assistant Business Editor

Finance and Planning Minister Dr Peter Phillips said the Government strongly believes that the next phase of the four-year programme with the International Monetary Fund (IMF) should focus on the growth agenda.

He said the Government, therefore, "agrees with the IMF that further and more expeditious improvement in the business environment is needed for sustainable growth".

Addressing a press briefing at the ministry's office in Kingston on Thursday, the minister said, however, that "there is an urgency to create a more enabling macroeconomic environment, which would be supportive of stronger investor confidence".

At the briefing, IMF Mission Chief Dr Jan Kees Martijn, who led the team which conducted the third review, said Jamaica has met all the quantitative and indicative targets for the quarter to December 2013, as well as all structural benchmarks.

Economic activity is tentatively estimated to have expanded by about 1.4 per cent year-on-year in the last quarter of 2013 and remains broadly in line with the IMF's projections, Martijn said.

He added that execution of the government Budget for 2013-14 has been broadly on track, notwithstanding shortfalls in tax revenues owing, in particular, to weak domestic demand, but overall policy implementation under the programme remained strong.

"Provided that performance remains strong, board consideration of the third review of the programme could take place towards the end of March and, upon approval, about US$71 million would be made available to Jamaica," said the mission chief.

Phillips said the March quarter, which constitutes the fourth under the IMF agreement, will be challenging given the programme of work, parliamentary agenda and "the very steep targets."

The IMF mission, which conducted the third review between February 5 and 13, discussed the Jamaican Government's strategies to meet the March benchmarks and slight modifications to the strategies, he said.

"We are resolved that with the continued support of our partners and stakeholders these targets will be met," the finance minister said.

Phillips said that some of the major issues the mission and the Government identified for the programme going forward were the macro-framework, design and implementation of a fiscal rule, tax reform and administration and, most importantly, accelerating economic growth.

"Notwithstanding the challenges, broad understandings have been reached on these issues and, correspondingly, on the text of the supplemental memorandum of economic and financial policies and technical memorandum of understanding," he said.

The minister said the Government also saw the next phase of the programme as one of consolidating the gains thus far.

"Consequently, with continued support of the multilateral development partners, we will be pursuing major reforms - public-sector financial management and overall public-sector modernisation, fiscal rule, omnibus banking (and) reforms to the securities dealers sector for which work is well advanced," Phillips said.