Jamaica passes 10th IMF test
The executive board of the International Monetary Fund (IMF) yesterday completed the 10th review of Jamaica's economic performance under the four-year programme, enabling an immediate purchase of an amount equivalent to SDR28.32 million (about US$39.3 million).
Following the board's discussion of the review, Min Zhu, IMF deputy managing director and acting chair, said "the authorities continue to have an impressive track record of strong programme implementation under the extended-fund facility".
He said macroeconomic stability continued to strengthen, vulner-abilities had reduced substantially, and structural reforms had progressed well.
Min Zhu said: "Jamaica has made important achievements under the economic programme. Inflation and the current-account deficit have fallen significantly, supported by low oil prices. Business confidence continues to be strong and private credit growth is showing signs of recovery, while public debt is falling."
However, he pointed out that overall growth remained weak, and unemployment, though declining, remained high.
Continued structural reforms should help boost investment and growth by sustainably reducing energy costs, improving financial access, and upgrading public infrastructure, Min Zhu said.
"With macroeconomic stability well established, the recalibration of fiscal and monetary targets should help support growth and job creation," added the IMF deputy managing director.
"The modest relaxation of fiscal policy is intended to increase growth-enhancing capital expenditures, while continuing to protect social spending. A looser monetary stance, with a faster pace of monetary growth to create more room for private-sector lending, will complement fiscal policy in supporting growth," he said.
Min Zhu noted that "fiscal sustainability requires continued reduction in the Government's wage bill and safeguarding revenues".
In that regard, he said: "Concrete efforts are needed to modernise the public sector and improve the efficiency of public services. It is also essential to strengthen fiscal revenues by improving Customs and tax administration, and broadening the tax base."