Summary:EXECUTIVE SUMMARY
Macroeconomic developments are broadly in line with program projections. There are
signs of a gradual recovery from the effects of the global financial crisis and hurricane
Sandy. Real GDP growth for 2013/14 is projected at just under 1 percent, supported by
improved activity in the tourism, mining, and agricultural sectors. Inflation has increased due
to the depreciation of the exchange rate as well as higher administered prices in the context
of the recent fiscal package. International reserves are in line with program requirements,
but remain low. The execution of the 2013/14 budget has remained broadly on track. Strong
implementation of the program would lay the foundation for sustained economic growth.
Program performance is on track, in spite of the difficult economic environment.
Jamaica’s four-year, SDR 615 million (225 percent of quota) Extended Arrangement under
the EFF was approved by the IMF Executive Board on May 1, 2013. All end-September
quantitative performance criteria and structural benchmarks were met. The macroeconomic
outlook and financing scenario remain broadly in line with earlier projections. The
authorities are pressing ahead with the next round of reforms, including strengthening the
fiscal policy framework, reforming the securities dealers sector, and enhancing public
financial management.
Program risks. Risk to the program remains high, including possible external shocks, weak
confidence and anemic external demand that could hamper the growth recovery, shortfalls
in budget financing and revenue collection, and policy slippages.
Appraisal. Based on the performance to date and the authorities’ updated policy intentions
and commitments, staff recommends completion of the second review under the EFF.
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