## 1jamea2020001 - EXECUTIVE SUMMARY

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### Summary and request
- COVID-19 shock hit Jamaica a few months after completion of its precautionary Stand-By Arrangement with the Fund.
- Authorities requested emergency financial support under the Rapid Financing Instrument (RFI) of 100 percent of quota (SDR 382.9 million or about US$520 million).
- Established reform track record created buffers that are invaluable in responding to the COVID-19 crisis, but domestic outbreak impacts, increasing fiscal needs, falling remittances, and a sudden stop in tourism receipts generate a sizable balance-of-payments need.

### Recent developments and outlook
- Institutional reforms over the last seven years: Fiscal Responsibility Law, inflation targeting with greater exchange rate flexibility.
- COVID-19 epidemiology and containment (as reported):
  - As of end-April 2020: 422 cases confirmed, with 8 fatalities.
  - Government closed air and sea borders to incoming passenger traffic and restricted communal gatherings.
- Macroeconomic outlook:
  - FY2020/21 economic contraction: projected to contract by 5.3 percent in FY2020/21.
  - Tourist arrivals expected to recover only gradually; remittances fall; mining-sector weakness due in part to delays in reopening the Alpart alumina refinery.
  - Jamaican dollar depreciated against the US dollar by 6 percentage points in April, offsetting earlier appreciation; nominal effective exchange rate broadly stable year to date.
  - Banks remain well capitalized with low levels of non-performing loans.

### Balance-of-payments, financing needs, and reserves (selected figures preserved verbatim)
- Current account deficit projected to widen from 2.3 to 7.3 percent of GDP in FY2020/21.
- Urgent external financing need: nearly US$1.2 billion (close to 8 percent of GDP).
- Reserves expected to decline to around US$3.3 billion but remain above 100 percent of the Fund’s reserve adequacy metric.
- Jamaica: External Financing Requirements and Sources (2020/21, in millions of US dollars) — selected entries:
  - Financing requirements: Pre-COVID19 1,616; Post-COVID19 1,674
  - Current account deficit: Pre-COVID19 362; Post-COVID19 1,114
  - o/w: Travel receipts: Pre-COVID19 3,113; Post-COVID19 995
  - o/w: Oil imports: Pre-COVID19 1,423; Post-COVID19 656
  - o/w: Remittances: Pre-COVID19 2,292; Post-COVID19 1,902
  - Capital account: Pre-COVID19 11; Post-COVID19 -529
  - Government 1/: Pre-COVID19 2,551; Post-COVID19 488
  - Other capital outflows: Pre-COVID19 -1,308; Post-COVID19 943
  - Financing sources: Pre-COVID19 1,699; Post-COVID19 496
  - FDI (net): Pre-COVID19 219; Post-COVID19 216
  - Government borrowing 1/: Pre-COVID19 1,270; Post-COVID19 251
  - Financing gap: Pre-COVID19 -83; Post-COVID19 1,177
  - Potential financing sources: RFI 529; IFIs 312; Other official support / reserves drawdown -83 to -53337 (as reported)
  - Memorandum: Current account (percent of GDP) -2.3 (Pre-COVID19) -7.3 (Post-COVID19)
  - Reserves: 3,688 (Pre-COVID19); 3,634 (Post-COVID19); 3,351 (Post-COVID19 projection)
  - (In months of prospective imports of GNFS) 6.0; 6.0; 7.3
  - (In percent of ARA metric) 112; 109; 105

### Fiscal response, CARE program, and fiscal projections (selected figures preserved verbatim)
- Primary objectives: minimize loss of human life and protect livelihoods.
- Government actions:
  - Declared whole of Jamaica a disaster area and established a special taskforce to coordinate COVID-19 response and recovery.
  - Introduced targeted measures to support jobs and vulnerable populations.
  - Committed to continuing medium-term debt reduction efforts but temporarily reducing the primary surplus, implying a modest (two-year) delay in achieving the Fiscal Responsibility Law goal of bringing debt down to 60 percent of GDP (deferred from FY2025/26 to FY2027/28).
- Authorities revising primary surplus target for FY2020/21 to 3.5 percent of GDP; supplementary budget to be submitted to Parliament in May.
- Financing increased fiscal needs by redirecting resources from delayed capital projects and relying on cash buffers from asset divestments (including Wigton Wind Farm and Trans-Jamaican Highway proceeds).
- Fiscal data (J$ millions and percent of GDP) from Jamaica: FY2020/21 Fiscal Impact of COVID (as reported):
  - Revenue: 675,885 (29.7% GDP) Pre-COVID; 660,885 (29.0% GDP) Projection; 579,584 (27.3% GDP) Post-COVID
  - o/w Tax Revenue: 603,785 (26.5% GDP) Pre-COVID; 588,785 (25.8% GDP) Projection; 509,884 (24.0% GDP) Post-COVID
  - Expenditure: 661,018 (29.0% GDP) Pre-COVID; 671,018 (29.4% GDP) Projection; 640,292 (30.1% GDP) Post-COVID
  - Programme: 232,803 (10.2% GDP) Pre-COVID; 242,803 (10.7% GDP) Projection; 228,711 (10.8% GDP) Post-COVID
  - o/w CARE program: ... Pre-COVID; 10,665 (0.5% GDP) Projection; 16,000 (0.8% GDP) Post-COVID
  - Compensation of Employees: 221,368 (9.7% GDP) Pre-COVID; 221,368 (9.7% GDP) Projection; 221,426 (10.4% GDP) Post-COVID
  - Interest: 132,645 (5.8% GDP) Pre-COVID; 132,645 (5.8% GDP) Projection; 135,983 (6.4% GDP) Post-COVID
  - Capital: 74,203 (3.3% GDP) Pre-COVID; 74,203 (3.3% GDP) Projection; 54,171 (2.5% GDP) Post-COVID
  - Overall Balance: 14,867 (0.7% GDP) Pre-COVID; -10,133 (-0.4% GDP) Projection; -60,708 (-2.9% GDP) Post-COVID
  - Primary Balance: 147,512 (6.5% GDP) Pre-COVID; 122,512 (5.4% GDP) Projection; 75,275 (3.5% GDP) Post-COVID
  - Nominal GDP: 2,278,800 (Pre-COVID); 2,278,800 (Projection); 2,126,404 (Post-COVID)

- CARE program measures (as reported):
  - Supporting Employees with Transfer (SET) – Cash: Employees in any sector who lost their job after March 10
  - COVID General Grant: Grants targeted at occupational groups particularly affected
  - COVID Compassionate Grant: Unconditional grants to the informally employed and unemployed who apply
  - Business Employee Support and Transfer (BEST) – Cash: Businesses in the tourism sector that retain workers earning less than the lowest tax threshold of J$1.5 million
  - COVID PATH Grants: PATH beneficiaries receive 50% increase in benefits for the Apr – Jun period
  - COVID Student Loan Relief: Deferral of student loan principal and interest payments for April, May and June
  - COVID Small Business Grants: MSME’s with sales of J$50 million or less who filed tax returns and payroll returns in 2019/20
  - CARE program fiscal stimulus: J$ 16 billion (as reported)

### Monetary and financial sector measures
- Bank of Jamaica (BOJ) actions:
  - Policy rate kept at historic low of 0.5 percent.
  - Maintained accommodative monetary policy stance and provided liquidity to ensure market functioning.
  - Supporting deposit-taking institutions and securities dealers; secondary market purchases of Government of Jamaica bonds; redeeming certain BOJ securities early; repo operations under enhanced collateral rules.
  - Removed limits and penalties on overnight borrowing by financial institutions; temporarily waived RTGS fees for customer transactions.
  - FX policy: allowing exchange rate to adjust flexibly, standing ready to smooth undue FX volatility through FX sales, FX swaps, and sale of long-dated FX-linked central bank notes.
  - Total liquidity injections by the BOJ via short-term lending facilities and asset purchase program are estimated to be about J$ 57 billion (as reported).
- Credit relief and financial sector support:
  - Development Bank of Jamaica rescheduling SME loans for up to three months and offering loan moratoria and payment holidays to BPO sector.
  - National Housing Trust reduced rates on new and existing mortgage loans.
  - Banks considering case-by-case loan moratoria, payment holidays, and covenant changes.

### Debt developments, sustainability, and Annex I highlights
- Public debt fell from 114 percent of GDP in FY2016/17 to 93.5 percent in FY2019/20 due to large primary surpluses.
- Debt ratio expected to increase to 97.6 percent of GDP in FY2020/21 given contraction and temporary suspension of annual fiscal target of 5.4 percent of GDP.
- Medium-term debt target of 60 percent of GDP under Fiscal Responsibility Law to be amended and modestly deferred from FY2025/26 to FY2027/28.
- Baseline public gross nominal debt (percent of GDP): 2018: 114.7; 2019: 94.4; 2020: 93.5; 2021: 97.6; 2022: 89.9; 2023: 83.4; 2024: 77.2; 2025: 72.2.
- Public gross financing needs (percent of GDP): 2018: 12.9; 2019: 5.3; 2020: 11.8; 2021: 11.5; 2022: 7.4; 2023: 5.6; 2024: 6.6; 2025: 5.9.
- Real GDP growth (in percent): 2018: 0.1; 2019: 2.0; 2020: 0.1; 2021: -5.3; 2022: 3.9; 2023: 2.2; 2024: 2.1; 2025: 2.0.
- Effective interest rate (in percent): 2018: 8.8; 2019: 6.7; 2020: 6.8; 2021: 7.0; 2022: 6.7; 2023: 6.7; 2024: 6.5; 2025: 6.9.
- Stress tests:
  - Standard shocks and contingent liabilities alter debt path, with projections ranging between 69 and 84 percent of GDP by FY2025/26 depending on shock scenario.
  - Near-term public debt could deviate from baseline by 1.4 to 17 percent of GDP in FY2022/23 under standard stress tests.
  - Fan-chart analysis: upper quartile of confidence interval points to debt of 74 percent of GDP by FY2025/26.
  - MAC DSA heatmap indicates low liquidity risks: gross financing needs-to-GDP ratio stays below the 15 percent threshold across standard stress tests.
- Debt management actions:
  - Buybacks in September 2019 of outstanding global bonds totaling around US$1 billion and reopening of the global bond due in 2045 extended maturities.
  - Medium-term strategy up to FY2023/24 includes opportunistic liability management operations and plans to reduce reliance on FX-denominated borrowing and develop the local currency bond market.

### Risks and staff assessment
- Principal risk: pandemic being more severe and long-lasting than currently expected.
- Staff projections assume containment at moderate levels and resumption of activity once public health crisis recedes domestically and in partner countries.
- A more adverse pandemic trajectory would require additional healthcare strengthening, support for economic activity, and mitigation for livelihoods—generating additional external and fiscal pressures and weakening debt dynamics.
- Staff assessment:
  - RFI is the appropriate instrument given urgent balance-of-payments needs and high uncertainty.
  - Requested access under the RFI is within applicable limits under the GRA.
  - Jamaica’s debt remains sustainable over the medium term (albeit subject to risks) and maintains an adequate capacity to repay the Fund.
  - Staff recommends Board approval of Jamaica’s request for a purchase under the RFI of 100 percent of quota (SDR 382.9 million).

### Policy recommendations (staff)
- Fiscal:
  - Support measures taken by authorities; fiscal response judged appropriate given severity of shock.
  - Renewed commitment to medium-term debt target critical to anchor fiscal policy as shock recedes.
- Monetary and FX:
  - BOJ should maintain accommodative monetary policy stance.
  - Allow exchange rate to move in line with market conditions and act as shock absorber.
  - Deploy FX interventions to counter disorderly market conditions if they arise.
- Financial sector:
  - Payment holidays and covenant changes can help if introduced transparently, targeted, and prudently in line with regulatory best practices.
  - Supervisors should enhance monitoring of emerging credit risks in banks and nonbanks and coordinate with counterparts on possible cross-border spillovers from regional conglomerate structures.
- Governance and transparency:
  - Adhere to Public Procurement Act of 2015 with emergency fast-track procedures while ensuring transparency, fairness, and integrity.
  - Publish key procurement contract information, including beneficial ownership of awarded companies, and conduct ex-post audits of COVID-related spending.
  - CARE program subject to multiple verification processes requiring beneficiaries to register using tax identification numbers and via a transparent online portal.

### Modalities, safeguards, and authorities’ commitments
- RFI access decision and financing implications:
  - Staff recommends access of 100 percent of quota under the RFI.
  - Annual access of 100 percent of quota is SDR 382.9 million or about US$520 million.
  - RFI resources initially disbursed to the BOJ in a dedicated account to bolster FX reserves; can be drawn down by the government for budget support, should the need arise.
  - Fund credit outstanding will reach about 6½ percent of GDP or 31 percent of exports by the end of FY2020/21 (as reported).
- Safeguards and conditional steps:
  - Authorities commit to undergo a safeguards assessment.
  - Authorities agree to provide Fund staff with the most recently completed external audit reports and to authorize external auditors to hold discussions with staff.
  - Authorities to establish a framework between the BOJ and the Ministry of Finance and the Public Service clarifying responsibilities for timely servicing of obligations to the Fund if budget support is provided.
- Authorities’ policy commitments:
  - Maintain primary balance of 5.4 percent of GDP post-pandemic and meet the 60 percent of GDP debt target by FY2027/28 (with a modest two-year delay from original target).
  - Enshrine BOJ independence in law, develop FX and debt markets, establish an independent Fiscal Council, and advance public financial management and governance reforms.
  - Commit to transparency measures for pandemic-related procurement and expenditures and to undergo IMF safeguards procedures.

*IMF staff and Jamaican authorities, EXECUTIVE SUMMARY (May 10, 2020).*

### EXECUTIVE SUMMARY

### 1jamea2020001 - EXECUTIVE SUMMARY

### Summary
- COVID-19 shock hit Jamaica only a few months after successful completion of its precautionary Stand-By Arrangement with the Fund.
- Authorities request emergency financial support under the Rapid Financing Instrument (RFI) of 100 percent of quota (SDR 382.9 million or about US$520 million).
- Jamaica’s established track record of economic reforms created buffers that are invaluable in responding to the COVID-19 crisis, but domestic outbreak impacts, increasing fiscal needs, falling remittances, and a sudden stop in tourism receipts generate a sizable balance-of-payments need.

### Policy Response
- Primary objectives: minimize loss of human life and protect livelihoods.
- Government actions:
  - Declared whole of Jamaica a disaster area and established a special taskforce to coordinate COVID-19 response and recovery.
  - Introduced targeted measures to support jobs and vulnerable populations.
  - Committed to continuing medium-term debt reduction efforts but temporarily reducing the primary surplus, implying a modest (two-year) delay in achieving the Fiscal Responsibility Law goal of bringing debt down to 60 percent of GDP (deferred from FY2025/26 to FY2027/28).
- Bank of Jamaica (BOJ) actions:
  - Maintained accommodative monetary policy stance.
  - Provided liquidity to ensure market functioning and avoid an undue tightening of credit conditions.

### Staff Assessment
- RFI is the appropriate instrument at this juncture given urgent balance-of-payments needs and high uncertainty about the pandemic’s duration and scale.
- Requested access under the RFI is within applicable limits under the GRA.
- Jamaica’s debt remains sustainable over the medium term (albeit subject to risks) and maintains an adequate capacity to repay the Fund.
- Staff recommends Board approval of Jamaica’s request for a purchase under the RFI of 100 percent of quota (SDR 382.9 million).

*May 10, 2020*

### Recent developments and outlook
- Policy progress over the last seven years: institutionalized fiscal discipline through a Fiscal Responsibility Law, moved to inflation targeting with greater exchange rate flexibility; outcomes included entrenched macroeconomic stability, lowered public debt, all-time low unemployment, and strengthened financial oversight.
- COVID-19 impacts:
  - As of end-April 2020, 422 cases confirmed, with 8 fatalities.
  - Government closed air and sea borders to incoming passenger traffic and restricted communal gatherings.
  - FY2020/21 economic contraction: projected to contract by 5.3 percent in FY2020/21.
  - Tourist arrivals expected to recover only gradually; remittances fall; mining-sector weakness expected to persist (in part due to delays in reopening the Alpart alumina refinery).
  - Jamaican dollar depreciated against the US dollar by 6 percentage points in April, offsetting earlier appreciation; nominal effective exchange rate broadly stable year to date.
  - Banks remain well capitalized with low levels of non-performing loans.

### Balance-of-payments and financing
- Current account deficit projected to widen from 2.3 to 7.3 percent of GDP in FY2020/21.
- Drivers: sudden stop in tourist arrivals, weak mining exports, drop in remittances; lower oil prices help trade balance but effects more than offset.
- Financial account: FDI inflows expected to decline.
- Urgent external financing need: nearly US$1.2 billion (close to 8 percent of GDP).
- Expected support: Fund resources and additional resources from IFIs (IDB, World Bank, CDB) expected to meet financing need and limit reserve drawdown.
- Reserves expected to decline to around US$3.3 billion but remain above 100 percent of the Fund’s reserve adequacy metric.
- Jamaica: External Financing Requirements and Sources (2020/21, in millions of US dollars) — selected entries preserved as reported:
  - Financing requirements: Pre-COVID19 1,616; Post-COVID19 1,674
  - Current account deficit: Pre-COVID19 362; Post-COVID19 1,114
  - o/w: Travel receipts: Pre-COVID19 3,113; Post-COVID19 995
  - o/w: Oil imports: Pre-COVID19 1,423; Post-COVID19 656
  - o/w: Remittances: Pre-COVID19 2,292; Post-COVID19 1,902
  - Capital account: Pre-COVID19 11; Post-COVID19 -529
  - Government 1/: Pre-COVID19 2,551; Post-COVID19 488
  - Other capital outflows: Pre-COVID19 -1,308; Post-COVID19 943
  - Financing sources: Pre-COVID19 1,699; Post-COVID19 496
  - FDI (net): Pre-COVID19 219; Post-COVID19 216
  - Government borrowing 1/: Pre-COVID19 1,270; Post-COVID19 251
  - Financing gap: Pre-COVID19 -83; Post-COVID19 1,177
  - Potential financing sources: RFI 529; IFIs 312; Other official support / reserves drawdown -83 to -53337 (as reported)
  - Memorandum: Current account (percent of GDP) -2.3 (Pre-COVID19) -7.3 (Post-COVID19)
  - Reserves: 3,688 (Pre-COVID19); 3,634 (Post-COVID19); 3,351 (Post-COVID19 projection)
  - (In months of prospective imports of GNFS) 6.0; 6.0; 7.3
  - (In percent of ARA metric) 112; 109; 105

### Risks
- Principal risk: pandemic being more severe and long-lasting than currently expected.
- Staff projections assume containment at moderate levels and resumption of activity once public health crisis and containment recede domestically and in partner countries.
- A more adverse pandemic trajectory would require additional actions to strengthen healthcare, support economic activity, and mitigate livelihood impacts, generating additional external and fiscal pressures and weakening debt dynamics.
- Importance of maintaining social cohesion and protecting the most vulnerable, considering long-standing crime issues.

### Authorities’ response to the crisis — fiscal measures and programs
- FY2019/20 primary balance was 7 percent of GDP (exceeding the 6.5 percent of GDP budget target).
- Immediate March response included:
  - Additional allocation of 0.1 percent of GDP for medical equipment and training for healthcare workers.
  - Increase in the contingency reserve of 0.1 percent of GDP.
- Budget reset in early March: primary surplus target for FY2020/21 and outer years reset from 6.5 to 5.4 percent of GDP, reflecting asset divestment strategy and Fiscal Responsibility Law.
  - This reduction comprised 0.6 percent of GDP in permanent tax cuts and additional spending of nearly 0.5 percent of GDP for the CARE program.
- Authorities revising primary surplus target for FY2020/21 to 3.5 percent of GDP; supplementary budget to be submitted to Parliament in May to account for expected revenue shortfalls and spending reallocations.
- Financing increased fiscal needs by redirecting resources from delayed capital projects and less urgent programs and relying on available cash buffers from asset divestments (including Wigton Wind Farm and Trans-Jamaican Highway proceeds).
- Authorities currently not envisaging drawing down RFI resources for budget financing given cash resources and additional IFI financing, but request RFI resources to be available for budget support should need arise.

- Fiscal data (J$ millions and percent of GDP) from Jamaica: FY2020/21 Fiscal Impact of COVID (as reported):
  - Revenue: 675,885 (29.7% GDP) Pre-COVID; 660,885 (29.0% GDP) Projection; 579,584 (27.3% GDP) Post-COVID
  - o/w Tax Revenue: 603,785 (26.5% GDP) Pre-COVID; 588,785 (25.8% GDP) Projection; 509,884 (24.0% GDP) Post-COVID
  - Expenditure: 661,018 (29.0% GDP) Pre-COVID; 671,018 (29.4% GDP) Projection; 640,292 (30.1% GDP) Post-COVID
  - Programme: 232,803 (10.2% GDP) Pre-COVID; 242,803 (10.7% GDP) Projection; 228,711 (10.8% GDP) Post-COVID
  - o/w CARE program: ... Pre-COVID; 10,665 (0.5% GDP) Projection; 16,000 (0.8% GDP) Post-COVID
  - Compensation of Employees: 221,368 (9.7% GDP) Pre-COVID; 221,368 (9.7% GDP) Projection; 221,426 (10.4% GDP) Post-COVID
  - Interest: 132,645 (5.8% GDP) Pre-COVID; 132,645 (5.8% GDP) Projection; 135,983 (6.4% GDP) Post-COVID
  - Capital: 74,203 (3.3% GDP) Pre-COVID; 74,203 (3.3% GDP) Projection; 54,171 (2.5% GDP) Post-COVID
  - Overall Balance: 14,867 (0.7% GDP) Pre-COVID; -10,133 (-0.4% GDP) Projection; -60,708 (-2.9% GDP) Post-COVID
  - Primary Balance: 147,512 (6.5% GDP) Pre-COVID; 122,512 (5.4% GDP) Projection; 75,275 (3.5% GDP) Post-COVID
  - Nominal GDP: 2,278,800 (Pre-COVID); 2,278,800 (Projection); 2,126,404 (Post-COVID)

### CARE program measures (as reported)
- Supporting Employees with Transfer (SET) – Cash: Employees in any sector who lost their job after March 10 (date of Jamaica’s first COVID case)
- COVID General Grant: Grants targeted at occupational groups particularly affected by COVID measures (barbers, hairdressers, bar operators, market vendors, craft vendors, taxi and bus operators among others who are registered)
- COVID Compassionate Grant: Unconditional grants to the informally employed and unemployed who apply
- Business Employee Support and Transfer (BEST) – Cash: Businesses in the tourism sector that retain workers earning less than the lowest tax threshold of J$1.5 million
- COVID PATH Grants: PATH beneficiaries receive 50% increase in benefits for the Apr – Jun period
- COVID Student Loan Relief: Deferral of student loan principal and interest payments for April, May and June
- COVID Special Grants: Additional funding to existing programmes for homeless, those in shelters and infirmaries, and the disabled
- COVID Small Business Grants: MSME’s with sales of J$50 million or less who filed tax returns and payroll returns in 2019/20

### Procurement, transparency, and safeguards
- Public procurement: subject to the Public Procurement Act of 2015 and emergency-related fast-track procedures while adhering to transparency, fairness, integrity.
- Integrity Commission and Auditor General’s Department empowered to audit public procurement and COVID-related spending.
- Authorities plan to publish key procurement contract information, including beneficial ownership of awarded companies, and request ex-post audit of COVID-related spending.
- CARE program subject to multiple verification processes requiring beneficiaries to register using tax identification numbers and via a transparent online portal.

### Monetary and financial sector measures
- BOJ policy rate kept at historic low of 0.5 percent.
- BOJ actions to boost systemic liquidity:
  - Supporting deposit-taking institutions and securities dealers.
  - Secondary market purchases of Government of Jamaica bonds.
  - Redeeming certain BOJ securities early.
  - Repo operations under enhanced collateral rules.
  - Removing limits and penalties on overnight borrowing by financial institutions.
  - Temporarily waived RTGS fees for customer transactions to support increase in electronic payments.
- FX policy: BOJ allowing exchange rate to adjust flexibly, standing ready to smooth undue FX volatility through FX sales, FX swaps, and sale of long-dated FX-linked central bank notes.
- Credit relief efforts:
  - Development Bank of Jamaica rescheduling SME loans for up to three months and offering loan moratoria and payment holidays to BPO sector.
  - National Housing Trust reduced rates on new and existing mortgage loans.
  - Banks considering case-by-case loan moratoria, payment holidays, and changes in loan covenants for affected households and firms.

### Debt sustainability
- Public debt fell from 114 percent of GDP in FY2016/17 to 93.5 percent in FY2019/20 due to large primary surpluses.
- Debt ratio expected to increase to 97.6 percent of GDP in FY2020/21 given contraction and temporary suspension of annual fiscal target of 5.4 percent of GDP.
- Medium-term debt target of 60 percent of GDP under Fiscal Responsibility Law to be amended and modestly deferred from FY2025/26 to FY2027/28.
- Authorities have extended maturities through proactive debt management; gross financing needs modest.
- No international bond redemption due over the next year; domestic debt rollovers manageable.
- Debt path vulnerable to weaker economic outlook, exchange rate risks, realization of contingent liabilities from public bodies, and natural disaster risks.

### Policy recommendations (staff)
- Support measures taken by authorities to address pandemic; fiscal response judged appropriate given severity of shock.
- Authorities’ renewed commitment to medium-term debt target critical to anchor fiscal policy as shock recedes.
- BOJ should:
  - Maintain accommodative monetary policy stance.
  - Allow exchange rate to move in line with market conditions and act as shock absorber.
  - Deploy FX interventions to counter disorderly market conditions if they arise.
- Financial sector support:
  - Payment holidays and covenant changes can help businesses and households if introduced transparently, targeted, and prudently in line with regulatory best practices.
  - Supervisors should enhance monitoring of emerging credit risks in banks and nonbanks and coordinate with counterparts on possible cross-border spillovers from regional conglomerate structures.

### Modalities of support
- RFI is appropriate instrument: Jamaica meets qualification requirements for RFI support due to urgent balance-of-payments need and infeasibility of an upper-credit-tranche arrangement under current high uncertainty.
- Staff confident authorities will continue to consult with the Fund and pursue policies to address COVID-19 impact and ensure medium-term macroeconomic stability.

*Source: IMF staff and Jamaican authorities, EXECUTIVE SUMMARY (May 10, 2020).*

### 13.      Staff considers access of 100 percent of quota under the RFI to be appropriate. Jamaica

### 13.      Staff considers access of 100 percent of quota under the RFI to be appropriate. Jamaica

### Access decision and financing implications
- Staff recommends access of 100 percent of quota under the RFI.  
- The annual access of 100 percent of quota is SDR 382.9 million or about US$520 million.  
- Jamaica does not currently have an IMF arrangement, and access of 100 percent of quota is within the applicable access limits under the GRA.  
- RFI resources will be initially disbursed to the BOJ in a dedicated account to bolster FX reserves; fiscal financing needs are currently expected to be met through other sources, but RFI resources can be drawn down by the government for budget support, should the need arise.  
- Remaining external financing needs are expected to be filled through other official sources and a modest drawdown of international reserves.  
- Jamaica is assessed as having sustainable debt (Annex I). Key external debt indicators will be at elevated levels in FY2020/21 after drawing on the RFI (Table 7).  
- Fund credit outstanding will reach about 6½ percent of GDP or 31 percent of exports by the end of FY2020/21.  
- All repayments, costs, and charges related to the funds received from the Fund for budget financing will be the responsibility of the Ministry of Finance and the Public Service, with the BOJ handling these transactions as the fiscal agent of the Government.

### Safeguards and conditional steps
- The authorities commit to undergo a safeguards assessment. This assessment needs to be completed before the Executive Board approval of any subsequent arrangement to which the safeguards policy applies.  
- The authorities agree to provide Fund staff with the most recently completed external audit reports and to authorize the external auditors to hold discussions with staff.  
- Given the potential for budget support, the authorities confirm in their Letter of Intent that they will establish a framework (e.g., through a memorandum of understanding) between the Bank of Jamaica and the Ministry of Finance and the Public Service that clarifies the responsibilities for timely servicing of the financial obligations to the Fund.

### Authorities’ views and intended policy response
- The authorities foresee a significant economic impact from the COVID-19 shock, subject to a high degree of uncertainty, with a sharp economic contraction, a sudden stop in tourist arrivals, and a drop in remittances.  
- They emphasized the importance of preserving Jamaica’s broad-based policy consensus to contain the pandemic and to fast-track recovery efforts, and welcomed discussions with the Fund and other IFIs to secure financial assistance.  
- They noted ongoing work developing a Natural Disaster Risk Management policy framework which aided their ability to proactively respond to the COVID-19 shock.

### Fiscal policy stance and targets
- The authorities foresee a reduction in the primary balance for FY2020/21 to 3.5 percent of GDP to respond to the shock.  
- They currently expect to meet additional fiscal financing needs with existing cash buffers, domestic borrowing, and support from other official creditors, but welcome the possibility of relying on the RFI for budget financing should the need arise, while safeguarding adequate reserve buffers at the BOJ.  
- Despite the crisis-related delay, they are committed to maintaining a primary balance of 5.4 percent of GDP after the resolution of the pandemic and meeting the 60 percent of GDP debt target by FY2027/28.  
- Should growth overperform, they will utilize the additional revenues to meet the debt target sooner.

### Monetary policy and financial sector measures
- The inflation targeting framework, under greater exchange rate flexibility, provided the central bank with the necessary room to respond to the shock.  
- The BOJ highlighted efforts to ensure system-wide liquidity, while allowing the exchange rate to respond to market conditions and intervening in the FX market to stem excessive volatility.  
- The BOJ is cooperating closely with the Financial Services Commission and carefully monitoring the health of financial conglomerates.  
- In the post-COVID-19 period, the authorities are committed to finalizing amendments to the BOJ Act to enshrine the inflation targeting regime in law, enhance the functioning of the FX and debt markets, advance implementation of consolidated risk-based supervision, and introduce a comprehensive resolution regime.

### Staff appraisal — key judgments
- The COVID-19 pandemic is severely impacting the Jamaican economy; growth is expected to be significantly weaker in 2020 and there is an urgent balance-of-payments need. The economic outlook remains subject to an unusually high degree of uncertainty.  
- The authorities’ policy response is assessed as appropriate and is anchored by a robust monetary policy framework and a strong commitment to medium-term debt sustainability.  
- Targeted fiscal measures have been introduced to support jobs and vulnerable segments of the population. The national emergency warrants a temporary reduction of the primary surplus and a modest delay in achieving the Fiscal Responsibility Law’s goal of bringing debt down to 60 percent of GDP.  
- Staff welcomes the authorities’ renewed commitment to debt sustainability, including their plan to accelerate debt reduction efforts should growth overperform, given heightened uncertainty and associated risks to the economic outlook and debt dynamics.  
- The BOJ’s accommodative policy stance is judged appropriate, supported by exchange rate flexibility, with FX intervention limited to stem excessive volatility and counter disorderly market conditions, if they arise.

*IMF staff summary from the Jamaica country chapter.*

### 20.      Staff supports the authorities’ request for an RFI in the amount of 100 percent of

### 1jamea2020001 - 20.      Staff supports the authorities’ request for an RFI in the amount of 100 percent of 

### RFI request, justification, and staff position
- Staff supports the authorities’ request for an RFI in the amount of 100 percent of quota (SDR 382.9 million or about US$520 million).
- Justification: severity of the COVID-19 crisis on Jamaica’s economy and the resulting urgent balance-of-payments needs.
- Use of proceeds: Staff supports use of RFI resources for budget support, should the need arise.
- Debt/repayment capacity: Jamaica’s capacity to repay the Fund remains adequate.

### Key country-level indicators (as presented)
- Population (2018): 2.73 million
- Per capita GDP (2018): US$5733
- Quota (current; millions SDRs/% of total): 382.9/0.08%
- Literacy rate (2015)/Poverty rate (2017): 87%/19.3%
- Main products and exports: Alumina, tourism, chemicals, mineral fuels, bauxite
- Unemployment rate (Jan. 2020): 7.3%

### Macro projections and indicators (table excerpts reproduced verbatim)
- Real GDP1.41.02.00.1-5.33.92.22.12.02.0
- Nominal GDP5.97.86.54.8-1.29.47.47.27.17.1
- Consumer price index (end of period)4.13.93.44.84.45.35.05.05.05.0
- Consumer price index (average)2.44.63.34.64.74.95.05.05.05.0
- Exchange rate (end of period, J$/US$)128.7   126.0   126.5135.3..................
- Exchange rate (average, J$/US$)126.5   128.0   130.6135.8..................
- Nominal depreciation (+), end-of-period5.4-2.10.47.0..................
- End-of-period REER (appreciation +) (INS) 2/-1.4-1.56.6.....................
- Treasury bill rate (end-of-period, percent)6.33.22.21.8..................
- Treasury bill rate (average, percent)6.15.12.21.8..................
- Unemployment rate (percent)12.79.78.0.....................

### Fiscal accounts — selected figures and projections (verbatim)
- Budgetary revenue28.1    29.1    30.630.227.328.228.628.628.528.4
- Of which: Tax revenue 
25.7    25.8    26.426.924.025.325.825.925.926.0
- Budgetary expenditure28.2    28.6    29.529.330.128.528.628.128.027.6
- Primary expenditure20.4    21.6    23.223.223.722.723.123.123.023.0
- Interest payments 7.87.06.36.16.45.85.55.04.94.6
- Budget balance-0.10.51.20.9-2.9-0.30.00.40.50.8
- Public debt (FRL definition) 3/113.7   101.3    94.493.597.689.983.477.272.267.4

### Central government operations — headline monetary magnitudes (verbatim)
- Budgetary revenue and grants501,821560,901628,849649,759579,584655,758713,886764,537816,217873,123
- Tax 460,264497,022542,919579,397509,884588,633645,005693,029742,937798,009
- Budgetary expenditure503,356552,050604,597630,354640,292663,795715,087752,931801,960848,428
- Primary expenditure364,000416,869475,409498,867504,309529,187578,013618,874660,212706,042
- Interest139,356135,181129,188131,487135,983134,607137,074134,057141,748142,386
- Budget balance-1,5358,85124,25119,405-60,708-8,037-1,20111,60614,25724,695
- Public sector balance34,72820,24536,69220,528-69,708-8,037-1,20111,60614,25724,695
- Principal repayments75,390232,290132,990273,561184,495164,518138,040188,788184,552271,263

### External sector — balance of payments highlights (verbatim)
- Current account-1.2-3.0-2.2-2.3-7.3-4.1-2.8-2.6-2.7-3.0
- Net international reserves (US$ millions)2,769   3,075   3,0853,225   2,466   2,489   2,634   3,008   3,384   3,534
- Gross international reserves (US$ millions)3,324   3,657   3,6053,688   3,351   3,362   3,390   3,453   3,494   3,544
- Trade balance-3,014-3,601-3,640-3,937-2,515-3,515-3,857-3,899-4,036-4,217
- Exports (f.o.b.)1,2461,4941,9531,4291,1581,3611,4981,7151,7891,876
- Imports (f.o.b.)4,2605,0955,5945,3663,6734,8765,3545,6145,8266,093
- Services (net)1,0441,2291,3961,537-2041,0691,5981,6691,7521,840
- Net errors and omissions 1/-486-882-57799000000

### Monetary and financial sector (verbatim highlights)
- Net foreign assets354.0430.7433.0515.8470.1471.8515.9595.7671.2720.1
- Net domestic assets282.4325.7411.4456.8482.6570.7603.1604.0613.7655.9
- Credit to private sector515.6609.7702.5816.9791.9865.0979.41,109.11,258.61,430.8
- Liabilities to private sector (M3)636.4756.4844.4972.6952.71,042.41,119.01,199.71,284.81,376.1
- Money supply (M2) 385.1479.5542.1621.9420.7547.4548.4557.0606.0624.3
- Financial sector indicators (selected) — NPLs/loans2.94.76.58.97.05.45.04.12.92.62.62.2 ; Capital Adequacy Ratio (CAR)15.2   18.8   18.2   16.1   14.1   15.1   15.9   14.9   14.7   15.3   14.5   14.3

### Indicators of Fund credit and debt dynamics (verbatim)
- Disbursements382.9..................
- Stock of existing and prospective Fund credit729.9636.8542.0318.478.57.10.0
- Obligations94.7100.7101.3228.9242.572.07.2
- Principal (repayments/repurchases)86.093.194.8223.7239.871.57.1
- Charges and interest8.67.66.55.22.60.50.2
- Fund Obligations (Repurchases and Charges) as a percent of: Quota24.726.326.559.863.318.81.9
- Fund Credit Outstanding as a percent of: Quota190.6166.3141.683.120.51.80.0
- Memorandum: Quota (SDR million)382.9382.9382.9382.9382.9382.9382.9

*Source: IMF staff report (Jamaica) — extracted tables and text as provided in the content unit.*

### Annex I. Debt Sustainability Analysis

### Annex I. Debt Sustainability Analysis

### Overview and recent debt developments
- Jamaica’s public debt has fallen from 114 percent of GDP in FY2016/17 to 93.5 percent in FY2019/20.
- The debt-to-GDP ratio is expected to increase to 97.6 percent of GDP in FY2020/21 due to the impact of the ongoing pandemic, but resume its downward path thereafter to meet the Fiscal Responsibility Law debt target of 60 percent of GDP, with a modest lag, by FY2027/28.
- The primary balance has exceeded 6.5 percent of GDP for 7 years in a row prior to the COVID-19 shock.
- The primary surplus is expected to decline to 3.5 percent of GDP in FY2020/21 to accommodate the policy response to the COVID-19 crisis, financed by a drawdown of cash balances, including from recent divestments and rationalization of government assets.
- Despite the severe impact of COVID-19, the authorities are committed to bringing public debt below 60 percent of GDP by FY2027/28, although with a modest (two-year) delay from the original FY2025/26 target date under the Fiscal Responsibility Law.

### Debt trajectory, baseline projections, and assumptions
- Baseline public gross nominal debt (percent of GDP): 2018: 114.7; 2019: 94.4; 2020: 93.5; 2021: 97.6; 2022: 89.9; 2023: 83.4; 2024: 77.2; 2025: 72.2.
- Public gross financing needs (percent of GDP): 2018: 12.9; 2019: 5.3; 2020: 11.8; 2021: 11.5; 2022: 7.4; 2023: 5.6; 2024: 6.6; 2025: 5.9.
- Real GDP growth (in percent): 2018: 0.1; 2019: 2.0; 2020: 0.1; 2021: -5.3; 2022: 3.9; 2023: 2.2; 2024: 2.1; 2025: 2.0.
- Inflation (GDP deflator, in percent): 2018: 7.3; 2019: 4.5; 2020: 4.7; 2021: 4.4; 2022: 5.3; 2023: 5.0; 2024: 5.0; 2025: 5.0.
- Nominal GDP growth (in percent): 2018: 7.4; 2019: 6.5; 2020: 4.8; 2021: -1.2; 2022: 9.4; 2023: 7.4; 2024: 7.2; 2025: 7.1.
- Effective interest rate (in percent): 2018: 8.8; 2019: 6.7; 2020: 6.8; 2021: 7.0; 2022: 6.7; 2023: 6.7; 2024: 6.5; 2025: 6.9.
- Cumulative change in gross public sector debt (2018–2025): -26.0 (percent of GDP).
- Identified debt-creating flows, cumulative (2018–2025): -29.4 (percent of GDP).
- Primary deficit (percent of GDP), annual series: 2018: -6.4; 2019: -7.5; 2020: -7.0; 2021: -3.5; 2022: -5.4; 2023: -5.4; 2024: -5.4; 2025: -5.4; cumulative (2018–2025): -30.7.
- Primary (noninterest) revenue and grants (percent of GDP), annual series: 2018: 27.1; 2019: 30.6; 2020: 30.2; 2021: 27.3; 2022: 28.2; 2023: 28.6; 2024: 28.6; 2025: 28.5; cumulative: 169.5.
- Primary (noninterest) expenditure (percent of GDP), annual series: 2018: 20.7; 2019: 23.2; 2020: 23.2; 2021: 23.7; 2022: 22.7; 2023: 23.1; 2024: 23.1; 2025: 23.0; cumulative: 138.7.
- Automatic debt dynamics contribution (percent of GDP), annual series: 2018: 3.4; 2019: 0.4; 2020: 6.3; 2021: 7.7; 2022: -2.4; 2023: -0.5; 2024: -0.5; 2025: -0.1; cumulative: 4.0.
  - Interest rate/growth differential (percent of GDP), annual series: 2018: 1.5; 2019: 0.1; 2020: 2.2; 2021: 7.7; 2022: -2.4; 2023: -0.5; 2024: -0.5; 2025: -0.1; cumulative: 4.0.
  - Real interest rate contributions (percent): 2018: 1.6; 2019: 2.0; 2020: 2.2; 2021: 2.7; 2022: 1.1; 2023: 1.3; 2024: 1.1; 2025: 1.3; cumulative: 8.8.
  - Real GDP growth contributions (percent): 2018: -0.2; 2019: -1.9; 2020: -0.1; 2021: 5.0; 2022: -3.5; 2023: -1.9; 2024: -1.6; 2025: -1.4; cumulative: -4.7.
- Exchange rate depreciation contribution (percent of GDP): 2018: 2.0; 2019: 0.2; 2020: 4.1 (note: series then not shown).
- Other identified debt-creating flows (percent of GDP), annual series: 2018: -0.3; 2019: -3.5; 2020: -1.4; 2021: -0.2; 2022: -0.2; 2023: -1.0; 2024: -0.6; 2025: -0.5; cumulative: -2.7.
  - Compensatory flows from PCDF (percent of GDP), annual series: -0.3; -2.2; -2.2; -0.2; -0.2; -1.0; -0.6; -0.5; cumulative: -2.7.
- Contingent liabilities (percent of GDP): 0.0 across years shown.
- Bank recapitalization contribution (percent of GDP), noted: 0.0; -1.2; 0.9; 0.0; 0.0; 0.0; 0.0; 0.0; cumulative: 0.0.
- Residual, including asset changes (percent of GDP), annual series: 2.2; 3.7; 1.2; 0.2; 0.3; 0.5; 0.3; 1.1; 1.0; cumulative: 3.4.
- For FY2020/21 includes asset sales as announced in GOJ's 2020/21 Budget.

### Risks, stress tests, and sensitivity analysis
- All standard shocks and contingent liabilities in the stress tests alter the public debt adjustment path, with projections ranging between 69 and 84 percent of GDP by FY2025/26 depending on the shock scenario.
- In the near term, public debt could deviate from the baseline path by 1.4 to 17 percent of GDP in FY2022/23 under the standard stress tests, with relatively larger impacts under the foreign exchange shock, contingent liabilities shock, and the combined macro shock.
- Fan-chart analysis: the upper quartile of the confidence interval points to debt of 74 percent of GDP by FY2025/26.
- MAC DSA heatmap indicates low liquidity risks: the gross financing needs-to-GDP ratio stays below the 15 percent threshold across standard stress tests.
- Debt-profile vulnerabilities: FX-denominated debt in percent of total public debt exceeds the 75th percentile of peers (62 percent) by a small margin (Jamaica’s share noted as exceeding the peer 75th percentile).
- Stress-test scenario specifics (selected assumptions reported):
  - Primary Balance Shock: Primary balance series and effective interest rates shown for 2020–2025.
  - Real GDP Growth Shock: Real GDP growth under shock series includes 2020: -5.3; 2021: 3.1; 2022: 1.4; 2023: 2.0; 2024: 2.0; 2025: 2.0 in the shock scenario.
  - Real Interest Rate Shock: Effective interest rate series rises in shock scenarios (e.g., 2020: 7.0; 2021: 6.8; later years up to 7.5 depending on scenario).
  - Real Exchange Rate Shock and Combined Shock scenarios present variant paths for growth, inflation, primary balance, and effective interest rates leading to higher debt paths.
- Alternative scenarios: Historical scenario and Constant Primary Balance scenario shown; key assumption for Constant Primary Balance is primary balance held at 3.5 percent.

### Debt management actions and policy measures
- Authorities conducted buybacks in September 2019 of outstanding global bonds due in 2022, 2025, and 2028, totaling around US$1 billion.
- Buybacks together with reopening of the global bond due in 2045 led to a substantial maturity extension.
- Medium-term debt strategy up to FY2023/24 includes continued opportunistic liability management operations (LMOs) to mitigate costs and risks.
- Plans to reduce reliance on FX-denominated borrowing and to further develop the local currency bond market over the medium term are expected to benefit the public debt risk profile.
- Authorities have used asset divestments and rationalization of government assets to draw down cash balances in FY2020/21 financing the COVID-19 policy response.

### Assessment of sustainability and concluding observations
- Jamaica’s debt is assessed to be sustainable under the baseline, but remains vulnerable to uncertainties about the size and duration of the COVID-19 shock and associated risks to growth, the exchange rate, and fiscal revenues.
- The strong policy track record and the authorities’ commitment to meet the medium-term debt target sooner, combined with prudent debt management, can mitigate potential risks.
- Near-term gross financing needs are modest and liquidity risk is low under standard stress tests, though FX exposure and contingent liabilities present meaningful upside risk.

*Source: IMF staff. As presented in Annex I. Debt Sustainability Analysis (Jamaica).*

### Appendix I. Letter of Intent

### Appendix I. Letter of Intent

### Overview
- Government of Jamaica requests emergency financing from the IMF under the Rapid Financing Instrument (RFI) in the amount of SDR382.9 million, equivalent to 100 percent of quota, to respond to severe balance of payments needs arising from the COVID-19 shock.
- The request is intended to fill external financing gaps in FY2020/21 alongside reserves and available support from the World Bank and Inter-American Development Bank.
- The government commits to protect reform gains, advance structural agenda items, and maintain macroeconomic stability while avoiding measures that would exacerbate balance of payments difficulties or violate Article VIII of the Fund's Articles of Agreement.

### COVID-19 impact and containment measures
- First case reported March 10; as of May 10 total confirmed infections reached 502, with 9 recorded deaths.
- Government actions to slow spread:
  - Borders closed.
  - Island-wide daily curfew.
  - Lockdowns in areas with higher infection levels.
  - Social distancing measures and cancellation of large events.
  - School closures and quarantine of communities.
- Economic impact:
  - Tourism sector at a standstill.
  - Sharp decline in remittances.
  - Preliminary projection: real GDP growth could decline by over 5 percentage points in FY2020/21; staff projections indicate real GDP could contract by 5.3 percent in FY2020/21.
  - Balance of payments severely impacted; current account deficit expected to widen from 2.3 percent in FY2019/20 to 7.3 percent in FY2020/21.

### Fiscal measures and commitments
- Revised primary balance target for FY2020/21: 3.5 percent of GDP (from previously higher objectives).
- Government will recast the budget for Parliamentary approval in May to incorporate pandemic impact; a supplementary budget will be tabled in Parliament in May.
- COVID-19 Allocation of Resources for Employees (CARE) programme:
  - J$ 16 billion spending stimulus.
  - Provides temporary income support to formal and informal workers in affected sectors and vulnerable segments, and targeted relief to affected businesses.
  - Program elements: (i) temporary cash transfers to registered businesses in targeted sectors based on number of workers employed; (ii) transfers to individuals who lost employment on or after March 10; (iii) grants targeted at the most vulnerable segments.
- Debt targets and medium-term commitments:
  - Commit to meeting the 60 percent of GDP debt target by FY2027/28 (two-year delay owing to pandemic).
  - Re-affirmation of annual primary balance target of 5.4 percent of GDP once conditions permit.
  - If growth overperforms, additional revenues will be saved to meet debt target sooner.
- Governance, transparency and procurement:
  - Commit to adhere to best practices in procurement and contract awards related to the pandemic, ensuring transparency and ease of tracking COVID-19 expenditures in the budget.
  - Key information on procurement contracts, including beneficial ownership information of awarded companies, will be publicly available.
  - Request Auditor General’s Department to undertake and publish an ex-post audit of COVID-related spending.
  - Authorities will continue to disseminate information to citizens on government measures and available resources.

### Monetary and macro-financial measures
- Bank of Jamaica (BOJ) policy stance and actions:
  - Policy rate held unchanged at 0.5 percent.
  - Secondary market purchases of Government of Jamaica bonds from financial institutions.
  - Early redemption of BOJ securities.
  - Repo operations under enhanced collateral rules; broadening of acceptable repo collateral.
  - Removal of limits and penalties on overnight borrowing by financial institutions.
  - Total liquidity injections by the BOJ via short-term lending facilities and asset purchase program are estimated to be about J$ 57 billion.
  - Encouragement to banking sector to conserve capital by postponing dividend payments.
  - Banks are rescheduling loans and mortgages; mortgage rate cuts announced by the National Housing Trust.
  - BOJ will continue to rely on a flexible exchange rate, limiting FX interventions to stem excessive market volatility.
- Financial system and inflation framework:
  - Jamaica’s financial system remains sound and well capitalized.
  - Inflation target range: 4.0 to 6.0 percent.
  - Inflation targeting and exchange rate flexibility facilitate BOJ’s response.

### External financing and reserves
- Current account pressures due to fall in tourism, remittances, and weak mining exports.
- Mitigating factors:
  - Moderation in FX outflows from reduced tourism import demand.
  - Lower oil prices.
  - Lower consumer demand from expected economic contraction.
  - Reasonable stock of foreign reserves.
  - Contingency financing options: cash resources, domestic sources, untapped IFI capacity (including redirecting existing projects).
- Emergency RFI financing sought equals SDR382.9 million (100 percent of quota).

### Structural reforms and institutional commitments
- Continue development of FX and debt markets.
- Enshrine BOJ independence in law.
- Establish an independent Fiscal Council.
- Boost access to finance, especially for SMEs.
- Reduce skills gap and support inclusive growth.
- Improve governance of public bodies and enhance public financial management.
- Advance public sector transformation.
- Address gaps in AML/CFT framework and ensure long-term financial sector stability.
- In line with IMF safeguards policy:
  - Commit to undergoing a safeguards assessment.
  - Provide BOJ’s most recently completed external audit reports and authorize external auditors to discuss with IMF staff.
  - Establish a framework agreement between the Ministry of Finance and the Public Service and the BOJ on respective responsibilities for servicing financing obligations to the IMF, if IMF financing is on-lent to the government.

### Safeguards and transparency commitments
- Undergo safeguards assessment; share BOJ external audit reports; authorize auditor discussions with IMF staff.
- Publish key procurement contract information including beneficial ownership.
- Request Auditor General’s Department to undertake and publish ex-post audit of pandemic-related expenditures.
- Authorize IMF to publish this Letter of Intent and the staff report for the RFI disbursement.

### Key statistics and dates
- Request amount: SDR382.9 million, equivalent to 100 percent of quota.
- First COVID-19 case: March 10.
- Confirmed infections as of May 10: 502.
- Recorded deaths as of May 10: 9.
- Preliminary projection: real GDP growth could decline by over 5 percentage points in FY2020/21.
- Staff projection: real GDP could contract by 5.3 percent in FY2020/21.
- Revised primary balance target for FY2020/21: 3.5 percent of GDP.
- Annual primary balance target to be maintained (post-pandemic): 5.4 percent of GDP.
- Debt target: 60 percent of GDP by FY2027/28.
- Current account deficit: expected to widen from 2.3 percent in FY2019/20 to 7.3 percent in FY2020/21.
- BOJ policy rate: 0.5 percent.
- Total BOJ liquidity injections estimated: about J$ 57 billion.
- CARE program fiscal stimulus: J$ 16 billion.

*Source: Appendix I. Letter of Intent (Kingston, Jamaica, May 8, 2020) and accompanying Statement by Jamaica’s Executive Director and Senior Advisor (May 15, 2020).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1jamea2020001.pdf_