Jamaica Will be Good After IMF, Says Economic Oversight Committee Official

Economic Programme Oversight Committee (EPOC) Co-Chair, Keith Duncan. (Credit: JIS)

KINGSTON, Jamaica, Wednesday February 27, 2019 – Economic Programme Oversight Committee (EPOC) Co-Chair, Keith Duncan believes Jamaica is and will be in good stead to manage its affairs after the borrowing relationship with the International Monetary Fund (IMF) concludes later this year.

“We will have sufficient [net international] reserves, our debt levels will be down, tax revenues are buoyant, and we will continue to run primary surpluses, so that our debt to gross domestic product [GDP] ratio can be reduced to 60 per cent in fiscal year 2025/26,” Duncan said.

He said Government’s first Supplementary Budget target of $378.1 billion, and was 10.1 per cent over the intake of $353.1 billion for the corresponding period in 2017; revenue and grants amounting to $448.8 billion, which exceeded the budgeted $437.3 billion by 2.6 per cent; and a seven per cent Central Government Primary Surplus out-turn of $107.7 billion, which surpassed the $68-billion PSBA target, and the Government’s $809-billion first Supplementary Budget target for 2018.

The EPOC Co-Chair also indicated that capital expenditure, year over year, increased by $14.4 billion or 46.6 per cent from $31 billion between April and December 2017 to $45.4 billion for the corresponding period last year.

Key among the monetary targets, Duncan further stated, are a nine-month non-borrowed reserves total of US$2.5 billion, which significantly exceeded the PSBA target of US$2.2 billion; and net international reserves amounting to just over US$3 billion.

He also advised that the value of Jamaica’s dollar vis-à-vis the United States dollar as at February 25, 2019, was J$131.02 to US$1.

This, he said, reflected an appreciation of 1.9 per cent ($2.54), following a 6.56 per cent ($8.38) depreciation the previous month.

The EPOC Co-Chair said the overall strong performance enabled the Government to meet all eight macro-fiscal structural benchmarks, spanning November 2016 to December 2018.

“The Government has also met the 14 structural benchmarks for public-sector transformation, public bodies and public-service reform through end-November 2018,” Duncan indicated.

He advised that the sole outstanding PSBA structural benchmark is capping of the total stock of domestic arrears of seven public bodies at $6.4 billion during the programme period, “which is being met on a monthly basis, to date, by the Government.”

Duncan said based on these out-turns, coupled with the projected decline in the debt to GDP ratio to 96.4 per cent by the end of the 2018/19 fiscal year on March 31, and to 90.9 per cent at the end of 2019/20, “Jamaica is in a good place to be able to move on its own”.

He noted that the fifth PSBA review ends on March 8, with the final slated for June 201.

“So, we will be on our own and not in an IMF programme, according to statements from Prime Minister [Andrew Holness] and Minister of Finance and the Public Service [Dr. Nigel Clarke],” Duncan said.

The EPOC Co-Chair noted that successive Administrations have, since 2013, remained fiscally disciplined and prudent in negotiating Jamaica through the economic challenges experienced.

Additionally, he said measures have been implemented and are being pursued to further consolidate the gains recorded, in efforts to resuscitate Jamaica’s economy.

Notably, Duncan pointed out, is establishment of the independent Fiscal Council, slated to be up and running by the end of 2019, and affording greater autonomy to the Bank of Jamaica, through legislation, measures which are intended to ensure Jamaica “remains on track”.

He argued that debt reduction to 60 per cent of GDP will afford the Government increased fiscal space to channel greater resources into education, health, social transformation, and social intervention, thereby “spurring economic growth”.

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