RAMAKRISHNAN… the Jamaican dollar is broadly correctly valued
While the IMF has praised Jamaica for its exemplary implentation of difficult economic reforms, the fund is still at a loss why Jamaica’s economic growth should be so low.
“After more than four years of difficult economic reforms, Jamaica’s programme implementation remains exemplary,” states the staff appraisal for the second review under the IMF Stand-By-arrangement, released yesterday.
“All quantitative condiditons and structural benchmarks were met and the Government’s reform plan is broadly on schedule. Strong domestic ownership of the reform agenda across two different governments and the broader society has helped to entrench macroeconmic stability and fiscal discipline. The authorities sustained commitment coupled with the ongoing programme monitoring by civil society has paved the way for reforms to be increasingly domestically owned, designed and executed,” the IMF said in the staff apraisal.
Other positives included a reduction in unemployment to 12.2 per cent, the lowest rate in almost a decade, and the successful introduction of the FX auction system. But growth in the economy remains low — though higher than in pevious years — at just 1.3 per cent, below IMF projections of 1.7 per cent growth.
Dr Uma Ramakrishnan, IMF mission chief to Jamaica, said that despite growth in areas such a construction, manufacturing and tourism, much of the blame for the low growth could be laid on agriculture, which has been variously affected by flood and drought.
“Agriculture is highly sensitive to fluctuations in weather,” Ramakrishnan told the Jamaica Obsever from her Washington office in a video press conference at the IMF office at the Bank of Jamaica in downtown Kingston yesterday.“That is creating a drag on growth.”
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