Business
Jamaica confident of economic upturn
Jamaica says it is confident the island-nation will start to see economic growth as it implements the multi-million Economic Reform Program with assistance from the International Monetary Fund (IMF).
Finance Minister Dr. Peter Phillips is urging citizens to support the economic reform program, which aims to reduce the country’s debt, and set a platform for growth.
(More: A Stellar Record of Failure: The IMF and Jamaica)
He told a Manchester Chamber of Commerce Biz Clinic 2013 Forum recently that while the program’s implementation was a pre-requisite for concluding the new US$932.3 million four-year IMF’s Extended Fund Facility (EFF), it is also a “requirement for us to put our economy on a firm footing to achieve sustained levels of growth”.
The 4-year EFF forms a critical part of a total funding package of US$ 2 billion from Jamaica’s multilateral partners including the World Bank and the Inter-American Development Bank (IDB), with each having preliminarily agreed to allocate US$510 million over the next 4 years.
The program aims to reduce Jamaica’s debt from the current 145 percent of gross domestic product (GDP), to 96 percent by 2020.
Among the components of the economic reform program include the attainment of a 7.5 percent primary budgetary surplus target; implementation of a National Debt Exchange (NDX) program; tax reform; and public sector reform, restructuring of salaries to reduce ratio to GDP from 10.6 percent, as at March 31, 2013, to 9 percent by 2015/16.
Phillips said that there is “a tendency on the part of commentators” to associate the program solely with the EFF, indicating that whether or not there was an agreement, “we need these economic reforms, primarily, because we have an unsustainable level of public debt.
“It is true that the pain generally comes before the gain, and we are in a period now where the stresses are being felt. But, it is also the case that we can see the prospects of the growth, which is the focus of the entire program,” he said.
Phillips said the inflation outturn for the April to June quarter was 1.2 percent, which fell below the 2-3 percent forecast. Additionally, the Net International Reserves stood at just over US$ 1 billion, representing approximately 13 weeks of goods and services imports.
