Above: Kingston (CJ Photo)

By the Caribbean Journal staff

Jamaica is seeing a “significant improvement” in both business and consumer confidence, according to the International Monetary Fund, which recently visited the island.

According to Jan Kees Martijn, who let the mission for talks on the seventh review of Jamaica’s IMF-supported programme, the country’s business and consumer confidence reached a two-year peak in the September-December quarter of 2014.

“The Government of Jamaica’s resolute implementation of its economic program, centered on strengthening the foundation for growth and employment, is starting to yield tangible dividends,” he said. “Unemployment declined 0.7 percentage points from a year earlier to 14.2 percent in October 2014, and confidence in Jamaica’s economic policies is growing, as illustrated by the narrowing sovereign bond spread relative to the emerging market average.”

Martijn said all of the quantitative performance targets through the end of December were met, although the indicative target on tax revenue was “narrowly missed.”

“The Fund mission reached preliminary understandings with the authorities on economic policies that will accelerate the pace of reforms so as to further unlock growth and bolster financial stability,” he said. “These reforms have required society-wide sacrifices and staunch efforts by the Jamaican people but are expected to yield growth and employment dividends over the medium term.”

Most crucially, the fund said that the improving confidence and competitiveness were projected to stimulate demand and increase economic activity to the tune of a 2 percent increase in the 2015/2016 fiscal year.

“Reforms to spur growth by expanding the economy’s productive capacity are progressing,” Martijn said. “To improve competitiveness and available financing for private investment, the authorities are maintaining a flexible exchange rate and reinforcing their framework for monetary policy and financial sector stability.”