The country’s primary surplus target under the deal with the International Monetary Fund (IMF) has been reduced to 7.25 percent of GDP for this fiscal year and to 7 percent of GDP for FY2016/17.

This follows the conclusion of the tenth review under Jamaica’s EFF Programme with the IMF. According to IMF Mission Chief, Uma Ramakrishnan, with macroeconomic stability now well entrenched, and the debt dynamics improving, a loosening of fiscal policy and a realignment of monetary policies are both warranted to better support the real economy. She says this additional fiscal space will provide an opportunity to increase public spending on capital outlays that boost growth and job creation as well as to continue to protect social spending.

Ramakrishnan says further, a more expansionary monetary stance will help complement this fiscal expansion by supporting credit expansion and private-sector activity. Continued strong program implementation will remain important to achieve fiscal and debt sustainability.

Jamaica is online to receive US$39M should the board of the IMF approve the findings of the recently concluded review.

According to the government, it is confident that the Board will give approval for the disbursement as all quantitative targets and structural benchmarks for end-September 2015 have been met.

Ramakrishnan says gradual economic recovery is underway, with growth projected at about 1.5 percent in FY2015/16, and 2.5 percent for the next fiscal year. She says program implementation remains strong with all quantitative performance targets through end-September met and the authorities’ plan for structural reforms is also on track. BM