IMF Set to Review Jamaica’s Precautionary and Liquidity Line and the Resilience and Sustainability Facility Arrangements  

• The IMF team and the Jamaican authorities reached a staff-level agreement on the completion of the first reviews of Jamaica’s Precautionary and Liquidity Line (PLL) and the Resilience and Sustainability Facility (RSF). The IMF’s Executive Board is expected to consider these reviews in August.
• Over the past few years, Jamaica has been buffeted by a difficult global environment. However, entrenched macroeconomic stability and sound policy frameworks are helping the country to navigate this complex global environment. The economy has been recovering strongly—GDP growth for FY2022/23 is estimated at 4.3 per cent. It was supported by a strong rebound in tourism—which has returned to pre-pandemic levels—and the reopening of one of the largest alumina plants, which offset the impact of the terms-of-trade shock from the war in Ukraine. Furthermore, inflation is inching closer to the central bank’s target band.
• Tourism is buoyant and still strong—although moderating—remittances more than offset the large import bill from high fuel, food, and freight prices resulting in a low current account deficit, and international reserves are growing and are at healthy levels. The public debt has continued to fall, and the financial system remains well-capitalized and liquid.
• The outlook points towards continued growth, and inflation is expected to return to the mid-point of the central bank’s target range by year-end. Nonetheless, global risks remain high and include tighter-than-expected global financial conditions, higher-than-expected global energy and food prices, and the ever-present risks from climate events.
• The fiscal balance recorded an overall surplus in FY2022/23. International reserves continued to increase over the last fiscal year, strengthening external buffers, in line with objectives in the authorities’ programme. The government continues to treat the PLL as precautionary. The country remains committed to maintaining primary surpluses and achieving a 60 per cent debt-to-GDP ratio by FY2027/28, as prescribed by the Fiscal Responsibility Law.
• Significant progress is being made by the government with its ambitious agenda to green the economy and make it more resilient to climate change. In the context of the policy agenda under the Resilience and Sustainability Facility, they are completing reform measures that will introduce important climate-related elements in the fiscal framework and foster energy efficiency. The completion of these reforms will make available (Special Drawing Right)SDR191.45 million (about US$255 million) under the arrangement.

(Source: IMF)