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IMF: Strong start to Jamaica economic reform
KINGSTON—The International Monetary Fund’s (IMF), resident representative to Jamaica,Bert Van Selm, says despite a front loaded adjustment programme, the economy has seen some growth over the first year of the programme. Van Selm, made the comment in an address to people attending a Financial Services Commission seminar here on Wednesday.
He asserted that Jamaica's economic reform programme is off to a strong start and for the rest of the programme period, there will be no need for further fiscal tightening, but staying on course. He said this will have a big impact on the country's economic performance. “In the year that you tighten your fiscal policy, you normally expect to see a negative impact on your economic growth, but actually so far this year, we haven’t seen too much of that, we’ve actually had a little bit of economic growth, in spite of this fiscal adjustment.
So, going forward, that bodes well for the success of the programme, because a lot of the difficult stuff has already been done,” he said. Last week, Jamaica successfully completed its third review of the IMF programme. According to the IMF representative, despite a difficult year of micro-economic adjustments and reforms under the programme, there have been positive indications.
He also pointed to December's passing of tax reform laws in Parliament and the passage of new fiscal rules, saying these are important reforms which have been pending for a long time. Van Selm added that the government has been running a primary surplus of seven and a half per cent of GDP for this year. “The adjustment to get to this primary surplus of 7.5 per cent of GDP, that is happening in the first year of the programme and that is almost in the bag,” he said.
While noting that the outcome for the end of March was not yet known, he emphasised that the target was likely to be met.