Jamaica passes latest IMF test, but growth still weak

min zhu

IMF Deputy Managing Director and Acting Chair of the Executive Board Min Zhu.

KINGSTON, Jamaica, Friday December 17, 2015 – The International Monetary Fund (IMF) says Jamaican has passed its 10th review under its programme, but says economic growth is still weak and unemployment remains high.

Jamaica is benefitting from the IMF’s Extended Fund Facility (EFF) and completing the latest review gives it access to US$39.3 billion.

IMF Deputy Managing Director and Acting Chair of the Executive Board, Min Zhu, said the authorities in Jamaica continue to have an impressive track record of strong programme implementation under the EFF and have made important achievements under the economic programme.

He pointed to inflation and the current account deficit falling significantly, supported by low oil prices; business confidence being strong; private credit growth showing signs of recovery; and public debt falling.

“Nevertheless,” the IMF official added, “overall growth remains weak and unemployment, though declining, remains high. Continued structural reforms should help boost investment and growth by sustainably reducing energy costs, improving financial access, and upgrading public infrastructure.”

“With macroeconomic stability well-established, the recalibration of fiscal and monetary targets should help support growth and job creation . . . A looser monetary stance, with a faster pace of monetary growth to create more room for private sector lending, will complement fiscal policy in supporting growth.”

Min added that fiscal sustainability requires continued reduction in the government wage bill and safeguarding revenues.

“In this regard, concrete efforts are needed to modernize the public sector and improve the efficiency of public services. It is also essential to strengthen fiscal revenues by improving customs and tax administration and broadening the tax base,” he said.

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