KINGSTON: The International Monetary Fund (IMF) resident representative to Jamaica, Bert Van Selm, says despite a front loaded adjustment program, the nation’s economy has seen some growth over the first year of the program.
Van Selm made the comment during an address at a Financial Services Commission seminar in Jamaica last week.
He said Jamaica’s economic reform program is off to a strong start and there will be no need for further fiscal tightening for the rest of the program period.
Van Selm said this will have a significant impact on the country’s economic performance “because, in the year that you tighten your fiscal policy, you normally expect to see a negative impact on your economic growth, but actually so far this year, we haven’t seen too much of that, we’ve actually had a little bit of economic growth, in spite of this fiscal adjustment. So, going forward, that bodes well for the success of the program, because a lot of the difficult stuff has already been done.”
Two weeks ago, Jamaica successfully completed its third review of the IMF program.
According to Van Selm, despite a difficult year of micro-economic adjustments and reforms under the program, there have been positive indications.
He also addressed December’s passing of tax reform laws in Parliament and the passage of new fiscal rules, saying these are important reforms which have been pending for a long time.
Van Selm added that the government has been running a primary surplus of seven and a half per cent of GDP for this year.
“The adjustment to get to this primary surplus of 7.5 per cent of GDP, that is happening in the first year of the program and that is almost in the bag,” he said.
While noting that the outcome for the end of March was not yet known, Van Selm emphasized that the target was likely to be met.