IMF Reaches Staff-Level Agreement with Jamaica on the First Reviews of the Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF) Arrangement

IMF News, June 16, 2023

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Canonical URL: IMF Reaches Staff-Level Agreement with Jamaica on the First Reviews of the Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF) Arrangement

The IMF team and the Jamaican authorities reached staff-level agreement on the First Reviews of Jamaica’s Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF).
The agreements are subject to approval by the IMF Executive Board, which is expected to consider the reviews in August.
Mission dates: meetings held during June 12-16; mission led by Mr. Esteban Vesperoni.

GDP growth for FY2022/23 is estimated at 4.3 percent.
Recovery drivers included a strong rebound in tourism—which has reached pre-pandemic levels—and the reopening of one of the largest alumina plants.
Inflation is described as close to the central bank’s target band.
Buoyant tourism and still strong—although moderating—remittances more than offset the large import bill from high fuel, food, and freight prices, resulting in:
- a low current account deficit, and
- international reserves are growing and are at healthy levels.
The public debt has continued to fall.
The financial system remains well-capitalized and liquid.

The PLL continues to provide valuable insurance against downside risks; the authorities continue to treat the PLL as precautionary.
The authorities overperformed on indicative targets and met structural benchmarks under the PLL.
Structural benchmark progress included efforts to bring the AML/CFT framework to international best practice and improve data adequacy.
Fiscal outcome: the fiscal balance recorded an overall surplus in FY2022/23.
Authorities’ fiscal anchor and targets:
- Commitment to primary surpluses to reach a 60 percent debt-to-GDP ratio by FY2027/28, as prescribed by the FRL.
- Aim for a primary surplus in the FY2023/24 budget to continue reducing public debt.
Monetary policy remains data dependent and focuses on inflation convergence to the mid-point of the central bank’s target band.

The RSF supports Jamaica’s agenda to increase resilience to climate change, transition to a zero-carbon economy, and catalyze climate financing.
Completion of specified RSF reforms will make available SDR191.45 million (about US$255 million) under the arrangement.
Reform measures under the RSF will introduce important climate-related elements in the fiscal framework and foster energy efficiency.
Intended benefits of reducing climate vulnerability include fostering growth and job creation and incentivizing private sector financing for investments related to energy efficiency, emissions reduction, and increased resilience.

The outlook points towards continued growth, and inflation is expected to return to the mid-point of the central bank’s target range by year-end.
Global risks highlighted:
- tighter than expected global financial conditions,
- higher than expected global energy and food prices,
- risks from climate events.

Mr. Esteban Vesperoni: “The IMF team and the Jamaican authorities reached staff-level agreement on the First Reviews of the Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF) Arrangement. The agreements are subject to approval by the IMF Executive Board, which is expected to consider the reviews in August.”
The IMF team expressed gratitude to the Jamaican authorities and counterparts for their hospitality and very productive discussions.

IMF Communications Department, June 16, 2023.