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Jamaica Aces IMF Test - More Than J$4b Avail For Drawdown
Jamaica Aces IMF Test - More Than J$4b Available For Drawdown As The Country Meets Targets
Published: Saturday | August 28, 20100 Comments and 0 Reactions
Arthur Hall, Senior Staff Reporter
Jamaica has aced the second International Monetary Fund (IMF) quarterly test despite unplanned expenditure related to the west Kingston incursion and emergency spending in the health sector.
Local officials have been forced to tweak the Letter of Intent with the IMF to reflect the additional spending.
That revised Letter of Intent is expected to go before the IMF Board of Governors at the end of September for approval, but already the fund has indicated a willingness to accept the proposed changes.
"The IMF has demonstrated that its position is not one that is static, but it has the capacity to be responsive to changing needs," Finance Minister Audley Shaw announced yesterday.
Shaw was supported by Trevor Alleyne, head of the IMF mission to Jamaica, who noted that the revised Letter of Intent will need the approval of the Jamaican Government and the IMF executive board, which is scheduled to meet at the end of September.
Unplanned expenditure
But Alleyne noted that the unplanned expenditure has not prevented Jamaica from passing the latest quarterly test.
After a more than weeklong visit to the country by an IMF team, Alleyne said the targets for the second quarter under the US$1.3 billion standby agreement have been met.
"All end-June quantitative performance targets were met. A faster-than-expected improvement in macroeconomic conditions, especially the decline in interest rates on government securities, has had a net positive effect on the overall fiscal deficit," Alleyne said.
"Strong GCT (General Consumption Tax) collections, reflecting improved tax administration efforts, and the continued cautious execution of expenditure were key to meeting the primary surplus target. The exchange rate has stabilised at an appreciated level and the NIR (Net International Reserves) floor was exceeded by a large margin," added Alleyne.
He noted that Jamaica's structural reform agenda appears to be moving forward on schedule.
Alleyne also noted that the local authorities have prepared amendments to strengthen the effectiveness of the fiscal responsibility framework; drafted a public-sector master rationalisation plan; started implementation of a tax-administration reform; and made further progress in the divestment of public enterprises.
The IMF executive gave credit to the Government for the phasing in of enhanced capital requirements which has started with the implementation of the first instalment of risk weights applied to foreign-currency denominated securities.
According to Alleyne, based on the performance of the economic programme, the mission will recommend that the IMF executive board completes the second review of the borrowing arrangement which will result in the disbursement of $4.1 billion.
Published: Saturday | August 28, 20100 Comments and 0 Reactions
Arthur Hall, Senior Staff Reporter
Jamaica has aced the second International Monetary Fund (IMF) quarterly test despite unplanned expenditure related to the west Kingston incursion and emergency spending in the health sector.
Local officials have been forced to tweak the Letter of Intent with the IMF to reflect the additional spending.
That revised Letter of Intent is expected to go before the IMF Board of Governors at the end of September for approval, but already the fund has indicated a willingness to accept the proposed changes.
"The IMF has demonstrated that its position is not one that is static, but it has the capacity to be responsive to changing needs," Finance Minister Audley Shaw announced yesterday.
Shaw was supported by Trevor Alleyne, head of the IMF mission to Jamaica, who noted that the revised Letter of Intent will need the approval of the Jamaican Government and the IMF executive board, which is scheduled to meet at the end of September.
Unplanned expenditure
But Alleyne noted that the unplanned expenditure has not prevented Jamaica from passing the latest quarterly test.
After a more than weeklong visit to the country by an IMF team, Alleyne said the targets for the second quarter under the US$1.3 billion standby agreement have been met.
"All end-June quantitative performance targets were met. A faster-than-expected improvement in macroeconomic conditions, especially the decline in interest rates on government securities, has had a net positive effect on the overall fiscal deficit," Alleyne said.
"Strong GCT (General Consumption Tax) collections, reflecting improved tax administration efforts, and the continued cautious execution of expenditure were key to meeting the primary surplus target. The exchange rate has stabilised at an appreciated level and the NIR (Net International Reserves) floor was exceeded by a large margin," added Alleyne.
He noted that Jamaica's structural reform agenda appears to be moving forward on schedule.
Alleyne also noted that the local authorities have prepared amendments to strengthen the effectiveness of the fiscal responsibility framework; drafted a public-sector master rationalisation plan; started implementation of a tax-administration reform; and made further progress in the divestment of public enterprises.
The IMF executive gave credit to the Government for the phasing in of enhanced capital requirements which has started with the implementation of the first instalment of risk weights applied to foreign-currency denominated securities.
According to Alleyne, based on the performance of the economic programme, the mission will recommend that the IMF executive board completes the second review of the borrowing arrangement which will result in the disbursement of $4.1 billion.
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