August 30, 2024
PRESS OFFICER: Brian Walker
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the third reviews of the Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF) arrangement on a lapse-of-time basis.[1] 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. The authorities continue to treat the PLL as precautionary.
The response to recent shocks has strengthened the credibility of Jamaica’s fiscal and monetary policy frameworks. In FY 2023/24, Jamaica’s economy is estimated to have grown at about 2 percent with tourism above pre-pandemic levels and a continued recovery in mining. Unemployment has fallen and the economy is in a strong cyclical position. Inflation has returned to the Bank of Jamaica’s target band and the external position has strengthened with a current account surplus, rising FDI, and ample international reserves—which at end-March 2024 reached about US$5.2 billion, the highest level in Jamaica’s history.
Going forward, GDP growth is expected to converge to potential and inflation 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 are arising from potential global economic and financial shocks and natural disasters, which are mitigated by strong policy frameworks, the authorities’ excellent track record managing shocks, and their commitment to reforms. The impact of Hurricane Beryl raises downside risks to growth and upside risks to inflation in the near term.
The PLL has supported the authorities’ efforts to enhance financial supervision, the crisis resolution and AML/CFT frameworks, and data adequacy. Program performance has remained strong, and Jamaica continues to meet the PLL qualification criteria. All structural benchmarks were met and the 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 made progress with the action plan to improve data, including on the fiscal and external sectors.
The RSF has supported Jamaica’s ambitious agenda to make the economy more resilient to climate change, including reforms to accelerate the transition to renewables, 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. All RSF reform measures were met, comprising the analysis of climate-related fiscal risks, incentives for renewable energy, reporting requirements of climate risks for financial institutions, and a framework for green-bond issuance. These efforts have the potential to catalyze climate financing going forward.
[1] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.
