Jamaica’s borrowing relationship with the International Monetary Fund (IMF) could end when the country’s US$1.6-billion Precautionary Stand-By Arrangement (PSBA) concludes in September 2019.
Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says the Government and Fund are of the view that, barring any unforeseen circumstances, “Jamaica will be able to graduate from an IMF (borrowing arrangement) programme”.
“It just requires steadfast and faithful implementation of a series of economic reforms that we have already committed to, and getting those done on time…,” the Minister said.
He was speaking at Sterling Asset Management Limited’s annual investor briefing, held at the Spanish Court Hotel, New Kingston, on Thursday (June 7).
Dr. Clarke said Jamaica’s progression from a standby facility, initiated in 2010, to an Extended Fund Facility (EFF) in 2013, and the PSBA in 2016, consequent on the resulting macroeconomic out-turns, is indicative of the country “taking more ownership of its economic programme”.
These indicators include net international reserves totalling approximately $3.7 billion; lowering of the debt to gross domestic product ratio from a high of over 140 per cent down to under 120 per cent; and low inflation, with the out-turn at the end of the 2017/18 fiscal year coming in at approximately 3.5 per cent, which was lower than the four to six per cent projection.
The Minister noted that Jamaica recorded 13 successful reviews under the EFF, which spanned two Administrations, and was brought to “early termination” in 2016, making way for the successor PSBA.
He pointed out that unlike the EFF, which entailed reviews being conducted every three months, these are conducted every six months under the PSBA.
“The second big difference is that under the US$932-million EFF, the funds were actually transferred into the vaults of the Bank of Jamaica. Under this (PSBA) programme, the IMF has given us a security blanket of US$1.6 billion. That money is on standby in the event that Jamaica needs it. We have now gone a year and a half into the (PSBA) and (thankfully) we haven’t had need to draw on those resources,” Dr. Clarke