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Jamaica Passes Yet Another IMF Test

KINGSTON, Jamaica, CMC— Jamaica has passed its fifth consecutive quarterly International Monetary Fund (IMF) test with the government Friday pledging to continuing the extensive program of tax and public sector financial management reforms.

An IMF team wrapped up the assessment of the island’s economic performance for the period April to June noting that “despite challenges, Jamaica’s economic performance has been consistent with the programme and structural reforms are progressing.

“Fiscal performance continues to support the debt reduction objective, the external accounts are improving and economic growth is continuing, accompanied by steady growth in employment.”

In May last year, Jamaica entered into a four year US$948.1 million Extended Fund Facility (EFF) agreement with the IMF and the Ministry of Finance Friday said the government and the IMF staff had concurred that “boosting growth requires steadfast implementation of the fiscal and other structural reforms, supported by a strong social safety net.”

It said these reforms along with the implementation of major catalytic projects are important to boosting investor confidence.

“The Government of Jamaica is therefore committed to continuing the extensive programme of tax and public sector financial management reforms, public sector modernization, labour market reform as well as the implementation of additional measures to enhance the ease with which the private sector conducts business,” according to the Ministry of Finance.

The Ministry said significant progress has been made in strengthening the financial sector with the passage of the Banking Services Act.

Meantime, the IMF has indicated that due to the threat to economic growth arising from the extended dry spell it will make changes to some of the projections for Jamaica.

IMF mission chief Jan Kees Martijn said that there would be an updated Letter of Intent, reflecting this change. This is expected to be submitted next month.

“The economic outlook continues to improve,” with “activity… tentatively estimated to have expanded by 1.2 percent year-on-year during April-to-June 2014.”

But “the recent drought will temporarily eat into near-term growth and raise food price inflation,” hence the need to make the adjustments.

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