Jamaica Agreement Imf

“The IMF team has reached a preliminary agreement with the Jamaican authorities on a set of guidelines to complete the fifth review under the SBA. The IMF Executive Board audit is tentatively scheduled for April 2019. After authorization, an additional DDS 160.8 million (approximately $224 million) will be made available to Jamaica, representing approximately $1.4 billion in available loans. The Jamaican authorities continue to view the SBA as a precautionary measure. Fiscal stability will depend on the government`s ability to maintain a sustainable public sector wage bill, the second allocation component of the 2019/20 fiscal year. In 2018, the government signed a collective agreement (valid for 2017-2021) for a gradual increase of 16% over four years with unions representing 95% of all public sector employees. IHS Markit expects annual inflation to remain unchanged at 3.7% in 2019, but gradually rises to 4.4% in 2021, due to a supportive monetary policy that will boost domestic demand. Higher inflation will increase the risk that unions will demand larger wage increases, which in turn threatens the feasibility of the government`s fiscal targets by increasing public spending. . . .

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