Press Release No. 12/384

Press Release No. 12/384
October 5, 2012

An International Monetary Fund (IMF) mission visited Jamaica during September 25 - October 5, 2012 to conduct negotiations over an economic program that could be supported under an IMF financing arrangement. The mission met with the Prime Minister Hon. Portia Simpson Miller, Minister of Finance Hon. Peter Phillips, Bank of Jamaica Governor Brian Wynter, Financial Secretary Wesley Hughes, senior government officials, and representatives of the private sector and civil society. At the conclusion of the mission, Mr. Jan Kees Martijn, the Fund’s mission chief for Jamaica, issued the following statement today in Kingston:

“Jamaica has long-standing structural weaknesses. A key challenge is how to attain higher and sustainable rates of economic growth, while reducing macroeconomic risks, including from the high public debt and high unemployment. Recent fiscal actions, anchored on the Fiscal Responsibility Framework, are a promising first step to address the cycle of low growth and high public debt. Going forward, the authorities and the IMF team agree on the need for a medium-term economic program that:

• promotes a growth-oriented environment, aimed at improving productivity and competitiveness while raising efficiency;
• follows strong macroeconomic policies, reflected in significantly higher primary fiscal surpluses, a narrower current account deficit, fiscal and financial reforms, and strong financial sector regulation and supervision; and
• fosters social cohesion, including through well-targeted health care and education spending and a more effective social safety net.

“The mission and the authorities made significant progress in identifying policies that could underpin a Letter of Intent and Memorandum of Economic and Financial Policies. Mutual understandings have been established on:

• elements of a growth agenda that is consistent with debt reduction and fiscal consolidation;
• some important structural reforms to promote growth, support fiscal and external sustainability, and enhance financial market stability; and
• a preliminary timetable for implementing various structural benchmarks to monitor progress in meeting possible program objectives.

“Further deliberation of the strategy is still needed to take account of the complexity of the Jamaican situation. In that regard, the mission and the authorities have agreed on the next steps to be pursued. Staff and the authorities are committed to working as expeditiously as possible toward agreement on an economic program that can be supported under a Fund arrangement.

“The mission expresses its deep appreciation to the authorities and technical staff for their excellent cooperation.”