Private sector worried about slide in J$
Two private-sector organisations are warning that the Jamaican economy is nearing crisis level amid concerns of a rapid slide in the local currency.
At the end of trading yesterday, the US dollar was being sold at a record J$99.16. At the start of the year, the US dollar was trading at just above the J$93 mark.
The Jamaica Manufacturers' Association (JMA) said the private sector is increasingly worried about the movement in the exchange rate, especially since there is no sign that the slide will end soon. It warned that the prices of goods will continue to move up.
JMA President Brian Pengelley said the situation is compounded by the uncertainty surrounding the island's negotiation with the International Monetary Fund (IMF) for a four-year extended fund facility.
"The slide of the dollar is definitely contributing to the weakening of the economy which, as it continues, it is going to affect - if it is not affecting already - consumer pricing, so therefore it is affecting everybody in Jamaica and it's almost a critical position," he said.
The Private Sector Organisation of Jamaica (PSOJ) believes the sliding dollar and the decline in confidence is not a good sign for the country.
"Well, the value of the dollar is a concern, but what is of greater concern is the lack of confidence that is showing itself by a continued slippage of the value of the dollar against the US dollar. The country is crying out for some stability and for a finality to the IMF agreement and a gross programme to be put on the table as well as some resolution to our energy crisis," said PSOJ President Christopher Zacca.
The PSOJ said it was also concerned about the state of negotiations regarding the IMF deal.
"Well, the PSOJ is very concerned. We are entering the new Budget year with no IMF agreement in place, no definitive timetable. We have energy increases - we had an almost islandwide blackout over the Easter weekend ... we are very, very worried," Zacca said.
Although the IMF has released its executive board calendar for meetings up to April 10, Jamaica is yet to appear on the schedule.
Finance Minister Dr Peter Phillips had hoped that the IMF's Executive Board would have reviewed the extended fund facility before the end of last month, but was forced to recant that position last week.
The delay has been blamed on a number of issues, including lower-than-anticipated savings from the National Debt Exchange and the amount of money to be provided by the World Bank and Inter-American Development Bank.