KINGSTON, Jamaica: A senior International Monetary Fund (IMF) official says there are positive signs that Jamaica is beginning to rebound from the impact of the global economic recession.
Senior IMF Resident Representative in Jamaica, Dr. Gene Leon, made the announcement last week while noting the increase in economic growth from -3 per cent to -1 per cent.
While noting the critical input of the government’s US$2.4 billion 27 month standby agreement with the IMF in the process, Dr. Leon attributed the economic growth to positive developments in several key sectors, including tourism, the bauxite industry and exports.
“We do know that the world economy is improving. So, if the outside world is beginning to get better, we should expect to see some improvement domestically. This -1 per cent growth is still negative territory, but that is much better than the -3 per cent that we had before. Hopefully, we will cross that zero mark by early next year and, at that point, will be above the line,” Leon said at the Jamaica Exporters’ Association (JEA) breakfast forum.
Leon noted the inflation rate trending down, which he attributed to an appreciation of the foreign exchange rate, adding that falling inflation in the global marketplace has also contributed to the reduction. Furthermore, he said, the government is “doing a little better” in efforts to achieve primary fiscal balance.
Leon said that the confidence being displayed in the economy by business interests demonstrated that they are “a little bit more positive” about Jamaica now than they were at the end of 2009. Similarly, he said the global economy was also beginning to display confidence in Jamaica due, in part, to the country’s success with the Jamaica Debt Exchange initiative.
“You are now also willing to hold the government paper for less,” said Leon. “Interest rates are going down and if the government is able to pay less on interest, then that leaves the government with a little more money to do something else.”
Leon has advised the government to plan beyond the IMF standby agreement.
Last week, he told the Jamaica Chamber of Commerce that preliminary economic data suggest that Jamaica is likely to pass the upcoming IMF test, following the Fund’s review at the end of this month.
It’s the second of eight tests that the country must pass in order to get disbursements under the standby agreement. Reviews will be conducted at the end of three-month periods until February 2012.