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Economic Programme Oversight Committee co-chair Keith Duncan speaking at a recent press briefing on the country's performance under the Economic Reform Programme. (Photo contributed)

EPOC continues oversight of Jamaican economy after IMF

Economic Programme Oversight Committee co-chair Keith Duncan speaking at a recent press briefing on the country's performance under the Economic Reform Programme. (Photo contributed)

Despite the fulfilment of Precautionary Stand-by Agreement (PSBA) last month, and with it the end of the International Monetary Fund’s (IMF) oversight relationship with Jamaican Government, the Economic Programme Oversight Committee (EPOC) will continue to monitor activities in the Jamaican economy, in particular, the Government’s Economic Reform Programme.

“These commitments will form the basis for the monitoring of the GOJ Economic Reform Programme following the expiry of the SBA.”

— Economic Programme Oversight Committee

In a release distributed to media this week, EPOC said it “welcomes and lauds” the Government of Jamaica (GOJ) for delivering the GOJ Quantitative Performance Targets and Priority Actions Matrix for 2019/2020 and 2020/2021, outlined in the sixth and final review of the IMF’s PSBA.

“These commitments will form the basis for the monitoring of the GOJ Economic Reform Programme following the expiry of the SBA,” the release continued.

Strong performance vs weak inflation

EPOC reported, also, that the country continues to deliver strong fiscal performance and exceptional results, with tax revenues growing at higher rates than inflation year over year. However, the oversight committee said that even though inflation continues to remain low, it fell below the target of 3.3 per cent at the end of October.

Notwithstanding, Jamaica’s debt trajectory maintains a downward trend and will reach 93.5 per cent of gross domestic product by the end of fiscal year 2019/2020.

“Jamaica’s gross reserves continue to exceed the reserve adequacy metrics, providing a buffer against external shocks,” the press release informed, noting that the volatility in the foreign exchange market resulted in the Bank of Jamaica (BOJ) reducing its reserves by US$140 million.

The Bank of Jamaica in downtown Kingston, Jamaica (Photo: Jamaica Observer)

Furthermore, EPOC expressed hope that the central bank’s B-FXITT platform will reduce foreign exchange volatility, and the need to sell US currency, while increasing market transparency.

Low growth continues

Despite a high foreign exchange reserve, Jamaica continues to experience low growth due to the temporary closure of the bauxite-mining Alpart and with unfavourable weather conditions affecting agricultural output. The Planning Institute of Jamaica recently revealed that from June to September this year the country recorded growth of 0.3 per cent.

The split photo above shows aerial and ground views of the former Alumina Partners plant in St Elizabeth, Jamaica, now owned by the Chinese Jiquan Iron and Steel Company. (Photo: Steel Guru)

Added to that, the monitoring body cites crime and barriers to finance for SMEs as other contributors to low growth. “EPOC notes the efforts around developing a national consensus on crime and the initiatives by the public and private sectors to address the access to finance impediments,” it said.

To this end, EPOC called for the GOJ and BOJ to work towards inclusive growth.

“While the global and regional outlook for growth is skewed to the downside, business and consumer confidence remain high in Jamaica, along with the accommodative monetary stance maintained by BOJ, which could see the continued growth in credit to the private sector and strong domestic demand,” EPOC reasoned.