March 9, 2023 | By Colin O. Jarrett |
Over US$1.7B has been approved for Jamaica by the International Monetary Fund (IMF), under its precautionary and liquidity line arrangement (PLL), and resilience and sustainability facility (RSF).
The Executive Board of the international funding organization said the 24-month arrangement under the PLL with access of US$968 million (190% of quota) is to “provide insurance against risks from higher commodity prices, a global slowdown, tighter-than-envisaged global financial conditions and new COVID outbreaks”.
In the meantime, there has been another approval for the arrangement under the RSF for US$764 million (150% of quota) to strengthen physical and fiscal resilience to climate change, advance decarbonization of the economy and manage transition risks. The RSF is expected to catalyse funding for climate priorities from other official lenders and the private sector.
Finance and Public Service Minister in Jamaica Dr Nigel Clarke indicated that “Jamaica’s request from the IMF is aimed at increasing fiscal space and is premised on “looking across the horizon” given the prevailing global uncertainties coming out of the pandemic and amid the Russian war against Ukraine which could further impact world economic conditions in the months to come’.
At the same time, the IMF said Jamaica’s authorities’ response to recent shocks has been well-designed. “The fiscal policy response to COVID was nimble, supporting the economy in 2020, but then quickly resuming a downward path for the debt. Similarly, the response to the surge in fuel and food prices allowed for pass-through while providing targeted support within the existing fiscal envelope”.
The IMF further informed that “sound policy frameworks and policies prioritizing macroeconomic stability, the economy is now recovering strongly. As COVID waned, tourism has rebounded to pre-crisis levels and 2022 real GDP growth is expected to be around 4%.