“A sustainable reduction in the public sector wage bill is important to steer savings towards social and growth-enhancing investments. It is important to move forward with this difficult but critical reform. The use of the current period of the quadrennial collective agreement will help to prioritize government functions and establish a new compensation framework for public servants. “The IMF team and the Jamaican authorities have reached a staff-level agreement on a new economic programme for Jamaica, which would be supported by a 36-month monitoring agreement (SBA) with the IMF, with access of SDR 1.2 billion (or 312% of the quota, or about $1.7 billion). If approved by the IMF`s Board of Directors, SDR 300 million (approximately $430 million) would be immediately available. Given the Bank of Jamaica`s comfortable position, the Jamaican authorities have announced their intention to treat the SBals as a preventive measure, i.e. insurance against unforeseen economic shocks beyond Jamaica`s control. “The IMF team has reached a preliminary agreement with the Jamaican authorities on a series of measures to complete the fifth review under the SBA. The IMF Board of Directors` review is scheduled for April 2019. Upon approval, an additional SDR 160.8 million (approximately $224 million) will be made available to Jamaica, for a total of $1.4 billion.
The Jamaican authorities continue to view the SBA as a precautionary measure. “Once the crisis has subsided and builds on their demonstrated commitment to stability-oriented reforms and measures, the authorities should continue their ambitious reform agenda to support economic recovery and ensure strong and sustainable economic growth.” “The vigorous implementation of the reform agenda continues, with the sustained commitment delivering tangible dividends to Jamaicans. Unemployment is close to the lowest of all time, business confidence is high and the economy is expected to have grown by 1.8% in 2018, boosted by mining, construction and agriculture. International reserves should be comfortable with a more flexible exchange rate. By the end of December 2018, all quantitative performance criteria had been met and the structural reference value to be included in Parliament`s amendments to the Bank of Jamaica (BOJ) Act was completed in October 2018.