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Research company says even IMF may not help weak Jamaica economy
Friday, October 23, 2009
A British research and advisory company says that even with expected help from the International Monetary Fund (IMF), Jamaica's economy will probably remain the weakest in the Caribbean.
In its assessment and predictions for the Jamaican economy, the Economist Intelligence Unit (EIU) said that with a new IMF loan agreement pending, the focus over the next two years will be on maintaining fiscal austerity to keep public debt manageable.
It said Jamaica's severe economic recession has worsened an already strained fiscal position, but the US$1.2 billion which the government wants from the Fund, should prevent debt default.
However, the EIU said it might not prevent Jamaica from continuing to register poorer growth than any other country in the region.
"Downturns in major export sectors and a contraction of consumer demand will deepen the recession in 2009, when GDP contraction of 4.1 per cent is expected," the EIU said.
"We now expect further shrinkage of 1.6 percent expected next year, with mild recovery only in 2011."
It said that even in the event of a stronger global recovery, a rapid acceleration in growth would remain hindered by the high costs associated with "pervasive crime" in the country and by the heavy public debt burden.
The EIU said those issues would continue to discourage private investment.
Friday, October 23, 2009
A British research and advisory company says that even with expected help from the International Monetary Fund (IMF), Jamaica's economy will probably remain the weakest in the Caribbean.
In its assessment and predictions for the Jamaican economy, the Economist Intelligence Unit (EIU) said that with a new IMF loan agreement pending, the focus over the next two years will be on maintaining fiscal austerity to keep public debt manageable.
It said Jamaica's severe economic recession has worsened an already strained fiscal position, but the US$1.2 billion which the government wants from the Fund, should prevent debt default.
However, the EIU said it might not prevent Jamaica from continuing to register poorer growth than any other country in the region.
"Downturns in major export sectors and a contraction of consumer demand will deepen the recession in 2009, when GDP contraction of 4.1 per cent is expected," the EIU said.
"We now expect further shrinkage of 1.6 percent expected next year, with mild recovery only in 2011."
It said that even in the event of a stronger global recovery, a rapid acceleration in growth would remain hindered by the high costs associated with "pervasive crime" in the country and by the heavy public debt burden.
The EIU said those issues would continue to discourage private investment.
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