Above: Kingston (CJ Photo)

By the Caribbean Journal staff

The International Monetary Fund’s Executive Board has completed its third review of Jamaica’s performance under its Extended Fund Facility-supported programme.

The completion of the review enables the disbursement of around $71.4 million to Jamaica, bringing total disbursements so far under the arrangement to around $345.8 million.

“Jamaica’s programme implementation under the Extended Fund Facility has remained strong,” said Nayouki Shinohara, deputy managing director and acting chair of the IMF’s Executive Board. “The current account has improved markedly and international reserves have increased in line with programme requirements. The execution of the 2013/14 budget has remained broadly on track. However, the economic recovery is fragile. Sustaining the reform momentum and continued implementation of sound macroeconomic policies is necessary to address the persisting challenges and risks.”

Shinohara said that recent improvements in competitiveness and the “steadfast implementation of the macroeconomic programme” were expected to spur investor confidence in Jamaica.

Shinohara warned, however, that private investment “needs to be supported also by determined actions to reduce red tape and bureaucracy, while the strengthening of social protection programs should help make growth more inclusive.”

“The authorities’ plan to restrain expenditure and to meet the 2013/14 budget targets is commendable. Going forward, policies should rely more curtailing current spending,while protecting capital spending,” Shinohara said. “In the event of a revenue shortfall, additional contingency measures will be needed. Strengthening fiscal management, including an effective fiscal rule, will help entrench fiscal discipline and commitment to debt reduction. While important progress has been made to improve the tax system, revenue administration, public sector modernization, and public financial management reforms should remain a priority.”