Jamaica Off to Strong Start on IMF Reforms, But Economy Remains Sluggish

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Above: Kingston

By the Caribbean Journal staff

Jamaica is off to a strong start under its new programme with the International Monetary Fund, but the country’s economy remains less than productive.

The IMF concluded a staff mission to Jamaica last week to conduct its first review of the country’s IMF-supported programme, holding talks with Finance Minister Peter Phillips, Bank of Jamaica Governor Brian Wynter and other government officials.

But the news was not all positive.

“Recent economic developments mostly confirm the challenges of the Jamaican economy,” said Jan Kees Martijn, the IMF’s chief of mission for Jamaica.

Economy activity in Jamaica contracted by 0.7 percent in the fiscal year 2012/2013, the IMF said, with an increase in unemployment to 16.3 percent.

The IMF said fiscal performance had been better than projected, however, with the government’s primary surplus improving to 5.4 percent of GDP in the same period.

“Overall policy implementation thus far under the program has been strong and structural reforms are progressing,” Martijn said. “All quantitative performance targets and indicative targets for end-June were met, including the floor on social spending.”

For the next fiscal year, Jamaica is targeting a central government primary surplus of 7.5 percent.

If Jamaica’s performance under the programme “remains strong,” the IMF said, the organization’s board review could take place next month.

That could mean the availability of $30 million to Jamaica’s government.