Sixth Review Under the Stand-By Arrangements-Press Release; Staff Report; and Statement by the Executive Direct for Jamaica
On November 4, 2019, the Executive Board of the International Monetary Fund (IMF) completed the sixth and final review of Jamaica’s performance under the program supported by the Stand-By Arrangement (SBA). The 36-month SB A, with a total access of SDR 1,195.3 million (about US$ 1.65 billion), equivalent to 312 percent of Jamaica’s quota in the IMF, was approved by the IMF’s Executive Board on November 11, 2016 (see Press Release No.16/503). The Jamaican authorities continue to view the SBA as precautionary until the program expires on November 10, 2019, an insurance policy against unforeseen economic shocks that could lead to a balance of payments need.
Following the Executive Board’s discussion today, Mr. Tao Zhang Deputy Managing Director and Acting Chair issued the following statement:
“The Jamaican authorities have demonstrated an exemplary commitment to reforms under two consecutive IMF-supported programs that have spanned the last 6 and a half years. Difficult reforms have been implemented-with considerable sacrifices by the Jamaican people-that have institutionalized fiscal discipline and led to substantial reduction in public debt, which is now on track to meet the legislated target of 60 percent of GDP by March 2026. The unemployment rate is at an all-time low, inflation is subdued, the financial system is less vulnerable, and international reserves are comfortable.
“The authorities are committed to sustain policy discipline after the conclusion of the SBA. The government’s request to the Economic Programme Oversight Committee to continue monitoring its macroeconomic targets and reform commitments will support public accountability until the fiscal council becomes fully operational, while the proposed amendments to the BOJ Act will improve central bank governance and independence, allowing a greater focus on the central bank’s price stability mandate. These reforms, together with a well-functioning public bodies’ governance framework and a natural disaster financing policy, will help institutionalize the gains achieved under the Fund-supported programs.
“Important gains have been made in the oversight of financial institutions. The next steps should include enhanced group-wide supervision of financial conglomerates, improving data and analytics, better coordination among financial regulators, an improved legislative framework for the resolution of financial intermediaries, and further strengthening of the AML/CFT framework.
“Supply-side reforms are needed to promote inclusive growth and lower poverty. This requires productivity-enhancing public investments in human and physical capital, strengthened governance, greater financial inclusion, prioritizing measures to combat crime, and implementing policies that will help build resilience to natural disasters and weather fluctuations. To create fiscal space for these efforts, the government will have to strengthen fiscal institutions and modernize the compensation framework for public employees.”