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IMF test: A seventh straight perfect score

Published:Thursday | February 12, 2015 | 12:00 AM

Gary Spaulding, Senior Gleaner Writer

It's headed for an unprecedented seven straight.

That's what Finance and Planning Minister Dr Peter Phillips yesterday told diplomats of the upcoming International Monetary Fund (IMF) test.

Phillips suggested in diplomatic circles that he was making passing the tests a habit. He told ambassadors and high commissioners that he was confident ahead of the evaluation to be undertaken in February, which will look at the performance for the December 2014 quarter.

The finance minister asserted that this will result in a similar declaration by the IMF of a seventh "perfect score" with regards to the achievement of the set targets and structural benchmarks.

Addressing diplomats in a business session commemorating Diplomatic Week, Phillips said that a review of the macroeconomic indicators reveals an overall improvement in the economy, manifested in the continuation of positive trends and reversal of some negative ones.

He announced that Jamaica had successfully met all the quantitative targets and structural benchmarks for the first three quarters of 2014. This, Phillips asserted, represented a continuation of the successes since the start of the IMF programme.

Phillips said the positive performances under the programme have contributed to significant improvements in the prospects for the economy.

He cited increased investor confidence in Jamaica, particularly by international investors and a successful re-entry into the international capital market, where the country was able to borrow US$800 million from an oversubscribed offer at a relatively low interest rate.

Phillips also pointed to improvement in ratings by international agencies, positive reviews by international market watchers, and improvements in Doing Business and Competitiveness positions globally.

The finance minister reasserted that the Government had undertaken necessary policy and structural reforms to engender growth.

He pointed out to the diplomats that Forbes Magazine ranks Jamaica as the best rated country in the Caribbean to do business and it has moved up in the Global Competitiveness Index and the World Bank's Doing Business Report.

Phillips said that while the country has made significant progress since Independence, there are deficits on its national balance sheet, highlighted by the country's continued failure to achieve sustained economic growth.

He said average annual growth rates have been 0.5 per cent over the past 40 years compared to global average annual growth rate of three per cent.

"We presently have an unsustainable public debt stock," said Phillips. "This debt has now become a burden that places a stranglehold on our capacity to fund vital social services as well as the capital investments required to support sustained growth."

Phillips said that it is within this context that the Government negotiated a new agreement with the IMF in 2013 and prepared a Medium Term Economic Programme to achieve macro-economic stability, necessary for long-term growth and development of the Jamaican economy.

"We are beginning to see the fruits of our efforts and the laying of a solid foundation of fiscal consolidation, manifested by significant gains over the last two years," said Phillips.