KINGSTON: Jamaica has met all the quantitative targets of the International Monetary Fund, paving the way for a draw down of US$71 million.
The announcement was made last week at the conclusion of an IMF mission to conduct discussions on the third review of Jamaica’s IMF-supported program under the Extended Fund Facility (EFF).
“The Fund mission reached preliminary understandings with the authorities on a set of economic policies detailed in an updated Letter of Intent,” said Jan Kees Martijn, the Fund’s mission chief for Jamaica. “Discussions with the authorities focused on economic performance under the program and policies for the remainder of the program period.”
Martijn said the current account has improved and net international reserves increased to more than US$1 billion by end-December (with gross reserves at US$1.8 billion, equivalent to more than three months of imports).
“Overall policy implementation under the program remains strong,” he said. “All quantitative performance targets and indicative targets for end-December were met, including the floor on social spending. All structural benchmarks to date have also been met.”
Martjin said key elements of the authorities’ updated program include actions to promote growth by improving competitiveness and the business climate and pursuing strategic investments.
“Priority reforms will include a new on-line process for business registration, streamlining the development application approval process and putting in place a tracking system, projects to reduce the cost of electricity, and reforms to enhance access to credit and make the labour market more flexible,” he said.
The IMF team emphasized the need for the implementation of an action plan to modernize tax and customs administration, with a stronger Large Taxpayers Office, improved IT systems and performance measurement and actions to lower the cost of compliance for taxpayers and towards trade facilitation.
They also called for the establishment of an effective fiscal rule to enhance fiscal transparency and lock in the gains from fiscal consolidation; further developing the financial system and strengthening the social protection framework, with enhanced efforts to move recipients from welfare to work.