Jamaica successfully concluded programme arrangements with the Inter- national Monetary Fund (IMF) in November, following a six-and-a-half-year engagement. This, incorporated the US$932 million Extended Fund Facility (EFF) and US$1.7-billion precautionary Stand-By Arrangement (SBA).
The IMF is maintaining its country office for another two years to provide technical and consultative support for the Economic Reform Programme (ERP), which recorded several positive outcomes during the year.
• Record fall in Jamaica’s Debt to GDP to 93 per cent.
• Longest period of Consecutive Growth (19 quarters).
• Economic growth of 1.2 per cent for the first nine months of the calendar year, between January and September.
• Healthy Net International Reserves totalling more than US$3 billion.
• An increase in Non-Borrowed Reserves at the Bank of Jamaica (BoJ) by more than US$1 billion.
• Record low inflation ranging between 1.4 and 3.3 per cent up to October.
• Consumer Confidence at 179.9 points, and Business Confidence rounding out at 141.2 points up to September.
• Record low unemployment of 7.2 per cent.
• A 2.4 per cent increase in the number of persons employed to 1,254,400.
• Introduction of Special Procurement Incentives for medium and small enterprises.
• Reduction in Transfer Tax from five to two per cent.
• Removal of the Minimum Business Tax.
Contingency Fund
• A Natural Disaster Contingency Fund was established to preserve Jamaica’s economic gains, with an initial $2 billion being deposited.
Upgraded Global Ratings
• International agencies, Fitch, Standard and Poor’s and Moody’s upgraded Jamaica’s rating from stable to positive.
EPOC
• The Economic Programme Oversight Committee (EPOC) will, through a memorandum of understanding, continue monitoring the reforms until the proposed independent Fiscal Council is established.
Multilateral Support
Jamaica continued to benefit from additional multilateral funding support.
• US$15 million Inter-American Development Bank (IDB) loan to initiate the Skills Development for Global Services Project, aimed at building out the country’s global services sector over the next four years.
• US$5 million United States Agency for International Development (USAID) grant to bolster the country’s resilience to natural disasters, in support of Jamaica’s Disaster Risk Financing Strategy.
• US$140 million World Bank loan to strengthen three key economic safeguards – building Jamaica’s resilience against natural disaster risks; supporting human capital development; and strengthening the social safety net for the society’s most vulnerable.
Budget
• The 2019/20 Estimates of Expenditure, totalling $803.24 billion, was tabled.
Bank of Jamaica
Several adjustments were made to the Central Bank’s operations.
• The interest rate on deposit-taking institutions’ overnight placements was lowered to 0.5 per cent.
• The cash reserve requirement was lowered to nine per cent, thereby releasing some $16.8 billion to deposit-taking institutions for lending.
Foreign Exchange Global Code
• The BOJ piloted the signing of the Code by key finance stakeholders. It provides guidelines for all authorised foreign exchange trading entities, and promotes the integrity, transparency and effective functioning of the market.