In September, the IMF completed its ninth review of the nation’s performance under the EFF agreement of 2013. The organization published a country report detailing the findings of this review. Read the entire report, and check out the 5 facts that stood out the most:
- Jamaica met all quantitative performance criteria for the period ending June 2015, passing the ninth consecutive test, and unlocking a further US$39.7 million of the US$932.3 million deal.
- However, there is still minimal economic growth. Their early calculations show real GDP growth as low as 0.2% for FY 2014/2015. As requested by the Government, the IMF agreed to reconsider the stringency of some key performance indicators of the agreement, including the overall balance of the public sector, the primary balance target and the ceiling on change in net domestic assets.
- Limitations to credit access persist. BOJ interest rates are down, however this has not translated to improvements in the interest rate charged by commercial banks to private customers or to increased lending. Further, despite some narrowing, the lending and savings rate gap remains wide in comparison to those observed across the region.
- Nominal exchange rate depreciation has increased our debt stock. The report indicates that over the 2 year period, April 2013 to March 2015, the depreciation of the nominal exchange rate led to a 13 percentage point increase in our debt-to-GDP ratio.
- More job cuts to meet wage bill target. The report outlines that the goal of a lower wage bill will be pursued through further cost rationalisation. This means, among other things, that the GOJ, “will continue to reduce the size of the public sector over 2014– 16 through the elimination of posts and an attrition programme.”
As seen by the five facts listed, though Jamaica continues to meet the conditions of the EFF deal, there has not been a positive change in the economy in terms of growth. With key legislative changes intended to better encourage business coming into play, including the implementation of the Banking Services Act and the reconfiguration of retail repo purchases, the rationale of the IMF agenda is that growth is to come.
Here’s how you can keep track of whether or not that proposition is turning out to be true: