IMF Executive Board Completes the Third Reviews under the Precautionary and Liquidity Line and the Arrangement Under the Resilience and Sustainability Facility with Jamaica

IMF News, August 30, 2024

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Canonical URL: IMF Executive Board Completes the Third Reviews under the Precautionary and Liquidity Line and the Arrangement Under the Resilience and Sustainability Facility with Jamaica

The Executive Board concluded the third reviews under Jamaica’s Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF).
The PLL continues to be treated as precautionary.
Completion of the third reviews allows for an immediate disbursement of SDR191.45 million (US$258million) under the RSF.
The PLL and the RSF were approved in March 2023 with access of SDR 727.51 million and SDR 574.35 million respectively.
The completion of third reviews makes available the remaining SDR191.45 million (about US$258 million) under the RSF and SDR 727.51 million (about US$980 million) under the PLL.

FY 2023/24 GDP growth is estimated to have been about 2 percent.
Tourism is above pre-pandemic levels and mining continued to recover.
Unemployment has fallen and the economy is in a strong cyclical position.
Inflation has returned to the Bank of Jamaica’s target band.
The external position strengthened with a current account surplus, rising FDI, and ample international reserves.
International reserves at end-March 2024 reached about US$5.2 billion, the highest level in Jamaica’s history.

GDP growth is expected to converge to potential.
Inflation is expected to return to the mid-point of the target band.
The external position is expected to remain strong.
Guided by the authorities’ Medium-Term Fiscal Framework (MTFF), public debt is expected to fall below 60 percent of GDP by FY2027/28.
Risks to the outlook include potential global economic and financial shocks and natural disasters.
The impact of Hurricane Beryl raises downside risks to growth and upside risks to inflation in the near term.
These risks are mitigated by strong policy frameworks, the authorities’ track record managing shocks, and their commitment to reforms.

Program performance has remained strong; Jamaica continues to meet the PLL qualification criteria.
All structural benchmarks were met.
The Bank of Jamaica (BOJ) overperformed on the indicative target on net international reserves.
The indicative target on the fiscal balance—with a smaller than expected surplus—was marginally missed with a negligible impact on the debt consolidation plan.
The authorities have progressed with an action plan to improve data, including on the fiscal and external sectors.
The PLL supported enhancements to financial supervision, crisis resolution and AML/CFT frameworks, and data adequacy.

The RSF supported Jamaica’s agenda to make the economy more resilient to climate change and to accelerate the transition to renewables.
All RSF reform measures were met, comprising:
- Analysis of climate-related fiscal risks.
- Incentives for renewable energy.
- Reporting requirements of climate risks for financial institutions.
- A framework for green-bond issuance.
These reforms aim to increase resilience to climate change, enhance the climate focus in policy frameworks, strengthen the management of climate risks by financial institutions, and create an enabling environment for green financial instruments.
The RSF-supported efforts have the potential to catalyze climate financing going forward.

Press Release No. 24/314 — IMF Communications Department, August 30, 2024.