Thu | Oct 22, 2020

IMF return imminent for Jamaica

Published:Wednesday | June 24, 2009 | 6:15 PM

It now appears certain that Jamaica will resume a borrowing relationship with the International Monetary Fund (IMF).

However the Government is insisting that a decision has not yet been made.

Daryl Vaz, the minister with responsibility for information says the Prime Minister will consult with the Social Partnership Group on the issue tomorrow.

A statement from Jamaica House says the Prime Minister will hold talks with the social groups on the terms under which Jamaica should enter into a funding arrangement with the IMF.

The social groups include the Private Sector, Trade Unions and the Opposition.

The move follows a Cabinet directive that Jamaica should explore the IMF Standby Facility in order to keep the medium term economic programme on track.

According to the IMF, its stand-by arrangement is designed to help countries address short-term balance of payments problems.

Just yesterday the finance minister made a submission to the Cabinet on the possible need for additional financing through the IMF.

The minister with responsibility for information, Daryl Vaz says a decision to return to the fund will only be made pending the outcome of the consultations.

Earlier this year, former Prime Minister Edward Seaga warned that Jamaica would have to return to the IMF.

Several financial analysts also supported Mr Seaga’s prediction.

Weeks after, the finance minister Audley Shaw indicated that the Government was struggling to finance its $555.7 billion.

The revenue budget has run into problems because of the fallout in earnings from sectors like bauxite and tourism.

In the meantime, it’s understood that the country could know before the end of next month the terms of the new agreement with the international agency.

Mr Shaw is to visit Washington next month for talks with the IMF as another step in the move to resume a borrowing relationship with the IMF.

Under the PNP administration, Jamaica ended its borrowing relationship with the IMF in the 1990s after more than two decades.