Jamaica reaches staff-level agreement with IMF
Published:Thursday | January 18, 2024 | 7:09 PM
Jamaica has reached a staff-level agreement with the International Monetary Fund (IMF) after the second reviews of the country's Precautionary and Liquidity Line (PLL) as well as its Resilience and Sustainability Facility (RSF).
The IMF team conducted the reviews during the period January 8 - 18, 2024.
The IMF team, led by Esteban Vesperoni, held meetings in Kingston and carried out a virtual mission with the Jamaican authorities to conduct the 2024 Article IV consultation and reached a staff-level agreement.
The IMF's Executive Board is expected to consider these reviews in February.
Under the arrangement, Jamaica will be able to access emergency funds under the PLL and RSF.
Both facilities were approved by the executive board in March 2023, with combined access to Special Drawing Rights, SDR 1,301.86 million or just about US$1.73 billion.
An SDR is the standard currency used to cover IMF agreements.
The IMF team noted that Jamaica's economy continued to recover in 2023.
It said after two years of rapid post-pandemic recovery, GDP growth is projected at 1.7 percent in FY2023/24, with tourism well above pre-pandemic levels.
“Over the last years, Jamaica has successfully reduced public debt, anchored inflation, and strengthened its external position. It has built a strong track record of investing in institutions and prioritising macroeconomic stability. This allowed Jamaica's response to recent global shocks to be prudent, agile, and supportive of growth,” the IMF review team said.
In an immediate reaction to the report, Finance Minister Dr Nigel Clarke hailed the agreement as a positive assessment of the state of Jamaica's economy despite challenges.
“The IMF staff press release confirms that Jamaica's economy is on firm footing and our economic programme is achieving its targets and objectives,” Clarke said as he pointed to Jamaica's record low 4.56 per cent unemployment rate.
He also pointed to the 10 consecutive quarters of economic growth.
He also said that Jamaica's stock of debt is at a 25-year low and that for the first time in 30 years, there is a current account surplus, which means that Jamaica has more from exports and incoming payments than for imports and outgoing payments to other countries.
The finance minister also pointed to the US$4.6 billion in net international reserves.
This represents about 25 weeks' worth of goods and services imports.
“The IMF team says the outlook points to sustained growth and inflation falling within the Bank of Jamaica's target range of four to six per cent amid sound external and fiscal positions and financial system stability. At the same time, the team is warning that global risks remain high. They point to the possibility of increased financing costs and lower projected global growth. Regional conflicts, they say, could increase global commodity prices, while climate-related events could weaken economic activity."
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