Aug 2013 Financial News

Jamaica passes Q1 IMF test

Aug 23, 2013

KINGSTON—Jamaica has met all agreed targets under the deal with International Monetary Fund (IMF), a signal that the first quarter test has been passed. The review of Jamaica’s performance under its extended fund facility with the IMF was conducted by the mission led by Jan Kees Martijn, which has been on the island since August 14. The international lending agency says the country has met all agreed targets under the deal up to the end of June, which now clears the way for a second disbursement of monies from the fund. The team found that the implementation of the programme so far has been strong and that the structural reforms have been progressing. “All quantitative performance targets and indicative targets for the end of the June were met. The budget for the current fiscal year is in place in line with the targets of the programme it is being implemented as intended. In addition, a number of legislative amendments have been adopted to improve tax administration and all other benchmarks to date have also been met in a timely manner.”

He said the IMF and the government have also agreed on an updated memorandum of economic and financial polices which will spell out the next steps to achieving the other targets. However, the IMF noted that economic activity is estimated to have contracted by 0.7 per cent in fiscal year 2012/13, with a further decline from April to June. It also noted the reported unemployment rate increased to 16.3 per cent at the end of April and inflation reached 9.7 per cent in July. Net international reserves increased to almost US$1 billion by the end of June, although reserves have declined since then in line with the seasonal pattern. The IMF said while recent economic developments mostly confirm the challenges of the Jamaican economy, the country has outperformed projections with the central government primary surplus improving to 5.4 per cent of gross domestic product (GDP).

Finance Minister Dr Peter Phillips pointed out that of the most critical components of the growth strategy will come from medium and small enterprises through employment. Through the Development Bank of Jamaica, the government is already facilitating the process by providing several loans. Phillips also pointed to the Credit Bureau Legislation and the Secured Obligations Legislation as other aspects of the growth agenda. The assessment by the IMF team is subject to approval by the IMF’s management and executive board. “Provided that performance remains strong, Board consideration of the first review of Jamaica’s IMF-supported programme under the EFF (Extended Fund Facility) could take place late September. Upon approval about US$30 million would be made available to Jamaica,” said a release from the IMF. (CANA)


Source:
Trinidad Guardian
Friday August 23, 2013

http://www.guardian.co.tt/business/2013-08-23/jamaica-passes-q1-imf-test