Jamaica: 2022 Article IV Consultation-Press Release; Staff Report and Staff Statement

IMF Staff Country Reports, February 10, 2023

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Canonical URL: Jamaica: 2022 Article IV Consultation-Press Release; Staff Report and Staff Statement

The 2022 Article IV Consultation notes Jamaica faced a difficult global environment driven by coronavirus disease (COVID), the war in Ukraine, and the ongoing tightening of global financial conditions.
Authorities provided targeted support to vulnerable households and firms during the pandemic and promptly scaled it back as conditions normalized.
In response to the war in Ukraine, domestic food and energy prices adjusted in line with international market shifts while targeted support was provided to the poor.
Discussions emphasized prompt post-COVID fiscal consolidation and monetary policy tightening as instrumental to secure debt sustainability, respond to global shocks, and aid the return of inflation to the target band.
The IMF staff assess that maintaining high primary balances over the medium term remains important for debt sustainability.
The consultation places special focus on climate change given Jamaica’s vulnerability to larger and more frequent climate events despite its insignificant contribution to global greenhouse gas emissions.

Jamaica experienced multiple external shocks: COVID, the war in Ukraine, and tighter global financial conditions.
Policy response during COVID: targeted support to vulnerable households and firms, followed by prompt scaling back as conditions normalized.
Price adjustments after the Ukraine war: domestic food and energy prices aligned with international market shifts; targeted support for poor households maintained.
Fiscal and monetary stance: post-COVID fiscal consolidation and monetary policy tightening were important to secure debt sustainability and reduce inflation toward the target band.
Debt sustainability: IMF staff underscore the importance of maintaining high primary balances over the medium term.

Maintain high primary balances over the medium term to support debt sustainability.
Continue prudent fiscal consolidation following the pandemic-related support measures.
Sustain monetary policy tightening as needed to return inflation to the target band.
Target support measures to protect the poor and vulnerable when external shocks affect domestic prices.

The Article IV consultation gives special attention to climate change risks.
Jamaica’s geographical and socio-economic characteristics increase its vulnerability to climate events that are becoming larger and more frequent due to global warming, despite Jamaica’s insignificant contribution to global greenhouse gas emissions.