IMF: “Tentative Signs” of Gradual Economic Recovery in Jamaica

Above: Kingston (CJ Photo)

By the Caribbean Journal staff

Is Jamaica on the road to recovery?

Not quite, but there are signs of life, according to the International Monetary Fund completed its second review of the country’s economic performance under a programme supported by an Extended Fund Facility arrangement.

“Overall programme implementation under the Extended Fund Facility remains strong, and there are tentative signs of a gradual economic recovery,” said Nayouki Shinohara, deputy managing director and acting chair of the IMF’s executive board. “All quantitative performance targets for end-September were met, including the floor on social spending, and structural reforms are proceeding steadily. The execution of the 2013/14 budget has remained broadly on track.”

The IMF also announced the approval of a $30.8 million disbursement, which brings total disbursements to Jamaica under the programme so far to $272.2 million.

“The next phase of the programme focuses on structural reforms to strengthen the fiscal policy framework,” Shinohara said. “The main priorities include the adoption of an effective fiscal rule to entrench fiscal discipline and consolidate the gains of fiscal consolidation in the medium term, the implementation of a comprehensive tax reform, and PFM reforms including strengthening budget preparation and the procedures for budget execution and cash management.”

The IMF approved the FF arrangement for four years and an overall total of $948.1 million in May.

“Achieving inclusive growth and enhancing the effectiveness of social protection are central components of the authorities’ reform programme,” Shinohara said. “The growth agenda needs to be bolstered by speeding up structural reforms that reduce bureaucracy and improve the government’s interface with the business community, in close collaboration with development partners.”