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IMF signals that Jamaica has passed first quarter test

Published: Thursday August 22, 2013 | 10:38 am Comments 0
(From left) Finance Minister Dr Peter Phillips with BOJ Governor Brian Wynter and Jan Kees Martijn, Head of the IMF mission to Jamaica (File)
(From left) Finance Minister Dr Peter Phillips with BOJ Governor Brian Wynter and Jan Kees Martijn, Head of the IMF mission to Jamaica (File)

The International Monetary Fund (IMF) has signalled that Jamaica has passed the first quarter test saying fiscal performance for the quarter as well as the last financial year outperformed projections despite declines in several key areas.

“Overall policy implementation thus far under the program has been strong and structural reforms are progressing. All quantitative performance targets and indicative targets for end-June were met,” the Fund stated.

The review of Jamaica’s performance under its extended fund facility with the IMF was conducted by the mission led by Jan Kees Martijn, which has been on the island since August 14.

The assessment by the IMF team is subject to approval by the IMF’s Management and Executive Board.

“Provided that performance remains strong, Board consideration of the first review of Jamaica’s IMF-supported program under the EFF (Extended Fund Facility) could take place late September. Upon approval about US$30 million would be made available to Jamaica,” an IMF spokesman said in a release this morning.

However, the IMF noted that economic activity is estimated to have contracted by 0.7 per cent in fiscal year 2012/13, with a further decline from April to June.

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 almost 1 billion US dollars by the end of June although reserves have declined since then in line with the seasonal pattern.

The IMF said while recent economic developments mostly confirm the challenges of the Jamaican economy, the country has outperformed projections with the central government primary surplus improving to 5.4 percent of gross domestic product (GDP).

The IMF also informed that for the fiscal year 2013/14, a budget that targets a central government primary surplus of 7.5 percent of GDP has been adopted and is now being implemented.

The review of Jamaica’s performance under its extended fund facility with the IMF was conducted by the mission led by Jan Kees Martijn, which has been on the island since August 14.

The assessment by the IMF team is subject to approval by the IMF’s Management and Executive Board.

“Provided that performance remains strong, Board consideration of the first review of Jamaica’s IMF-supported program under the EFF (Extended Fund Facility) could take place late September. Upon approval about US$30 million would be made available to Jamaica,” the IMF release stated.

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