The International Monetary Fund (IMF) completed its sixth and final review of Jamaica’s performance under the programme supported by the Stand-By Arrangement (SBA).
In a report released by the institution yesterday, the IMF said gains made by the country under successive IMF-supported programmes can be sustained with a “fully operational fiscal council and independent central bank”.
However, the IMF said reforms are needed on the supply side in order to “promote inclusive growth and reduce poverty”, continuing that this will require investments in human and physical capital. It also said greater financial inclusion and focus on tackling crime are essential.
“…unemployment rate is at an all‑time low, inflation is subdued, the financial system is less vulnerable, and international reserves are comfortable.”– International Monetary Fund Deputy Managing Director, Tao Zhang
Deputy Managing Director the IMF, Tao Zhang said “The Jamaican authorities have demonstrated an exemplary commitment to reforms under two consecutive IMF‑supported programmes that have spanned the last six and a half years.”
“Difficult reforms have been implemented – with considerable sacrifices by the Jamaican people – that have institutionalised fiscal discipline and led to substantial reduction in public debt, which is now on track to meet the legislated target of 60 per cent of GDP (Gross Domestic Product) by March 2026,” Zhang said,
Zhang also noted that the “unemployment rate is at an all‑time low, inflation is subdued, the financial system is less vulnerable, and international reserves are comfortable.”
With the advances made, the IMF said these should be followed up by enhance supervision of financial conglomerates, improved coordination among financial institutions and an improved legislative framework among others.
“…the proposed amendments to the BOJ Act will improve central bank governance and independence, allowing a greater focus on the central bank’s price stability mandate,” said Zhang. “These reforms, together with a well‑functioning public bodies’ governance framework and a natural disaster financing policy, will help institutionalise the gains achieved under the Fund-supported programs.”
The 36-month SBA, equivalent to 312 per cent of Jamaica’s quota in the IMF, was treated as an “insurance policy against unforeseen economic shocks” by the Jamaican government until the program expires on November 10, 2019.
The SBA, created in 1952, is the IMF’s primary lending instrument for emerging and advanced market countries and has been used frequently by member countries.