Jamaica to receive over $1B US from IMF

WASHINGTON, Aug 30, CMC – Jamaica is to receive more than one billion US dollars from the International Monetary Fund (IMF) after the Fund’s executive board Friday concluded the third review under the country’s Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF).

The PLL and the RSF were approved in March 2023, with access to Special Drawing Rights (SDR) 727.51 million and SDR 574.35 million respectively.

The completion of the third review makes available the remaining SDR191.45 million (US$258 million) under the RSF and SDR 727.51 million (US$980 million) under the PLL.

The IMF said that the PLL continues to be treated as precautionary.

It said that Jamaica’s response to recent shocks has strengthened the credibility of policy frameworks, supporting an economic environment characterised by sustained growth, declining debt, low inflation, and a strengthened external position.

Jamaica has continued to implement an ambitious reform agenda that strengthened the fiscal and financial policy frameworks and the climate policy agenda to make the economy more resilient to climate change.

In the 2023-24 financial year, Jamaica’s economy is estimated to have grown at about two per cent with tourism above pre-pandemic levels and a continued recovery in mining.

Unemployment has fallen and the economy is in a strong cyclical position.

Inflation has returned to the Bank of Jamaica’s target band and the external position has strengthened with a current account surplus, rising foreign direct investment (FDI), and ample international reserves, which in end-March 2024 reached about US$5.2 billion, the highest level in Jamaica’s history.

Going forward, GDP growth is expected to converge to potential and inflation to return to the mid-point of the target band.

The IMF said that the external position is expected to remain strong and that guided by the authorities’ Medium-Term Fiscal Framework (MTFF), public debt is expected to fall below 60 per cent of gross domestic product (GDP) by the financial year 2027-28.

“Risks to the outlook are arising from potential global economic and financial shocks and natural disasters, which are mitigated by strong policy frameworks, the authorities’ excellent track record managing shocks, and their commitment to reforms. The impact of Hurricane Beryl raises downside risks to growth and upside risks to inflation in the near term,” the IMF said.

It said the PLL has supported the authorities’ efforts to enhance financial supervision, crisis resolution and AML/CFT frameworks, and data adequacy.

Programme performance has remained strong, and Jamaica continues to meet the PLL qualification criteria.

“All structural benchmarks were met and the BOJ overperformed on the indicative target on net international reserves. The indicative target on the fiscal balance, with a smaller than expected surplus, was marginally missed with a negligible impact on the debt consolidation plan,” the IMF said, noting that the Jamaican authorities have made progress with the action plan to improve data, including on the fiscal and external sectors.

The RSF has supported Jamaica’s ambitious agenda to make the economy more resilient to climate change, including reforms to accelerate the transition to renewables, increase resilience to climate change, enhance the climate focus in policy frameworks, strengthen the management of climate risks by financial institutions, and create an enabling environment for green financial instruments.

“All RSF reform measures were met, comprising the analysis of climate-related fiscal risks, incentives for renewable energy, reporting requirements of climate risks for financial institutions, and a framework for green-bond issuance. These efforts have the potential to catalyse climate financing going forward,” the IMF added.