Press Release: IMF Executive Board Completes Third Review Under Stand-By Arrangement with Jamaica and Approves US$49 Million Disbursement
IMF News, January 14, 2011
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- Published: January 14, 2011
Overview
- The Executive Board of the International Monetary Fund (IMF) completed the third review of Jamaica’s economic performance under the Stand-By Arrangement (SBA) on January 14, 2011.
- Completion of the review enables the immediate disbursement of an amount equivalent to SDR 31.9 million (about US$49.3 million).
Key statistics and disbursements
- Immediate disbursement: SDR 31.9 million (about US$49.3 million).
- Total disbursements under the arrangement following this review: SDR 541.8million (about US$838.2 million).
- Original SBA approved on February 4, 2010: SDR 820.5 million (about US$1.27 billion).
Program performance and review outcomes
- Overall assessment: Jamaica’s performance under the program has been positive overall.
- All end-September quantitative performance criteria were met.
- The Executive Board approved modifications of certain performance criteria, including:
- A small relaxation of some fiscal targets to accommodate spending related to Tropical Storm Nicole.
- An increase in the floor on net international reserves.
Extracted statements by IMF Deputy Managing Director and Acting Chair Murilo Portugal
- “Overall performance under the Stand-By Arrangement has been satisfactory. Signs of recovery have emerged, with net job creation for the first time in four quarters, and inflationary pressures remain subdued, allowing an accommodative monetary policy.
- The authorities’ macroeconomic program continues to focus on restoring fiscal sustainability and increasing the economy’s resilience to external shocks. Further progress is necessary on the fiscal and structural reform agenda. Enhancing competitiveness and the overall investment climate is key to boosting potential growth.
- The authorities stand ready to take appropriate and timely measures to achieve the program’s objectives. Efforts have been intensified to divest the state-owned mining company, and compensatory measures were adopted to offset expenditure overruns. The authorities intend to move decisively with public sector rationalization, tax policy, and debt management reforms. They remain committed to public financial management reforms. Full implementation of the fiscal reform agenda will create fiscal space for contingency buffers and increased spending on social programs and growth-enhancing capital projects.
- Prudential indicators point to continued resilience of the financial system. Financial sector reforms aimed at strengthening prudential requirements and the overall supervisory framework are moving ahead broadly on schedule. The authorities plan to gradually wind down the Financial System Support Fund during 2011 and use its resources for general purpose international reserves.”
Policy directions and reform priorities
- Fiscal policy:
- Restore fiscal sustainability.
- Implement fiscal reform agenda to create fiscal space for contingency buffers and increased spending on social programs and growth-enhancing capital projects.
- Public sector rationalization, tax policy reform, and debt management reforms planned.
- Structural reforms:
- Enhance competitiveness and the overall investment climate to boost potential growth.
- Divestment of the state-owned mining company has been intensified.
- Financial sector:
- Continue financial sector reforms to strengthen prudential requirements and the supervisory framework.
- Gradual wind down of the Financial System Support Fund during 2011; use its resources for general purpose international reserves.
- Contingency and crisis response:
- Small relaxation of fiscal targets to accommodate Tropical Storm Nicole–related spending.
- Increase in the floor on net international reserves as part of program adjustments.
Press Release No. 11/10, January 14, 2011.