IMF国际货币组织全球-Jamaica_Sixth-Review-Under-the-Stand_58页_1mb

Jamaica: Sixth Review Under the Stand-By Arrangement

Core Content

The IMF completed the sixth and final review of Jamaica's performance under the 36-month Stand-By Arrangement (SBA), which was approved in 2016. The SBA had a total access of SDR 1,195.3 million (approximately US$1.65 billion), equivalent to 312 percent of Jamaica's quota. The program aimed to strengthen macroeconomic stability and implement structural reforms. Jamaica continues to view the SBA as precautionary until its expiration in 2019, acting as an insurance policy against unforeseen economic shocks.

Main Points

1. Strong Program Performance

• Quantitative targets and structural benchmarks were met by end-June 2019, marking a successful program completion.
• Fiscal discipline has been institutionalized, leading to a substantial reduction in public debt, which is on track to reach 60 percent of GDP by 2026.
• Unemployment reached a historic low of 7.82 percent in FY18/19, while inflation remained subdued.
• FX reserves are comfortable, and monetary policy has contributed to financial system stability.
• The primary balance exceeded the target by about J$19 billion (0.9 percent of GDP), supported by improved tax collection and international trade taxes.
• Capital expenditures are expected to meet budget targets by the end of the fiscal year despite delays in a major road project.
• Non-borrowed reserves were US$385 million above the target, reflecting strong tourism performance and reduced FX sales.

2. Policy Discussions

A. Safeguarding Fiscal Gains

• The FY2019/20 budget is on track, with tax revenues expected to modestly overperform.
• The Alpart mine closure is not anticipated to have a major impact on revenue due to current exemptions and limited economic spillovers.
• Social spending is increasing slightly, with a reallocation of funds to capital projects.

B. Inflation Targeting and Monetary Policy

• The Bank of Jamaica (BOJ) has kept inflation within the target range of 4–6 percent, averaging just above 4 percent in FY19/20.
• Core inflation remains low at around 2.5 percent.
• The BOJ has reduced the overnight policy rate by 325 basis points since 2017, and CRR was lowered from 12 to 7 percent.
• Inflation is expected to approach the midpoint of the target range by the end of FY19/20.

C. Financial Sector Resilience

• The FX market is being upgraded for greater transparency and price discovery.
• FX volatility remains a concern, with the BOJ's reduced intervention contributing to instability.
• Banks are well-capitalized and have a low NPL rate (2.4 percent of total loans), though mortgage debt is a significant component of household debt.
• Private sector credit growth has accelerated, with a focus on households and personal consumption.

D. Inclusive Growth

• Supply-side reforms are needed to promote inclusive growth and reduce poverty.
• Productivity-enhancing investments in human and physical capital, along with improved governance and financial inclusion, are key to achieving this.
• Natural disaster financing and crime reduction are also priorities.
• Fiscal space must be created to support these reforms, requiring modernization of public sector compensation frameworks and improvement of fiscal institutions.

Key Information

• GDP growth has been positive for 18 consecutive quarters, with an estimated 2 percent in FY18/19, although it is projected to decline to 0.8 percent in FY19/20 due to factors like drought and the Alpart mine closure.
• Poverty increased in 2017 to 19.3 percent, but the trend is still declining from a peak of over 24 percent in 2013.
• Social cash transfers are increasing but still lower than in other comparable countries.
• Interest expense has declined, contributing to a more stable fiscal position.
• Jamaica's credit rating was upgraded to "B+" by S&P in October 2019 due to an improved external position.
• Debt restructuring and active liability management have significantly reduced public debt.
• The FX market is expected to see a permanent technological solution for transparency by early 2020.
• Household indebtedness has increased but remains broadly in line with EM peers.
• Disposable income growth is weakening, increasing debt servicing risks for some households.
• Policy continuity is emphasized to safeguard the economic gains achieved, with the government requesting continued monitoring by the Economic Programme Oversight Committee.
• Reforms to the BOJ Act aim to improve central bank governance and independence, focusing on price stability.

Conclusion

The SBA has contributed to macroeconomic stability, fiscal consolidation, and reduced public debt in Jamaica. While the program is now complete, continued policy discipline and structural reforms are essential to sustain progress and promote inclusive growth. The government is committed to maintaining the gains and addressing remaining challenges in governance, financial inclusion, and natural disaster resilience.