KINGSTON: Following the International Monetary Fund’s seventh review of Jamaica’s economic performance under a four-year Extended Fund Facility, the U.S. based financial institution has awarded the Caribbean nation US$39 million.
IMF Deputy Managing Director, Mitsuhiro Furusawa, said the Government of Jamaica’s commitment to the US$932 million EFF “remains strong” and that program performance is on track and all quantitative performance targets for end-December were met.
He said structural reforms have progressed broadly on schedule.
“Macro-economic performance continues to be good and economic confidence has reached a two-year peak,” said Furusawa. “The decline in oil prices should help lower inflation expectations and boost demand.”
However, the IMF official said that increasing the pace of reforms is essential to boost growth and employment.
“Bold efforts are needed to reform the energy sector, improve the business climate, and advance investment in critical infrastructure,” said Furusawa.
He said the 2015-16 national budget demonstrates Jamaica’s continued fiscal discipline and will help keep public debt on a sustainable path.
Furthermore, the IMF official said maintaining the momentum for fiscal consolidation over the medium term requires boosting revenue and improving public sector efficiency.
“This involves strengthening customs and tax administration and further broadening the tax base. It is also essential to improve public financial management, accelerate the reform of the public sector, and contain public sector wage costs.
“Buttressing the financial sector hinges on meeting the key milestones for reforming the retail repo sector. Completing the transition of the retail repo businesses to a trust-based framework requires careful management. Implementing the Banking Services Act will be a necessary step to improve financial sector stability further,” said Furusawa.