Jamaica: 2024 Article IV Consultation and Second Reviews Under the Arrangement Under the Precautionary and Liquidity Line and Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Jamaica

JAMAICA IMFCountryReportNo.24/69 March2024 2024ARTICLEIVCONSULTATIONANDSECONDREVIEWSUNDERTHEARRANGEMENTUNDERTHEPRECAUTIONARYANDLIQUIDITYLINEANDARRANGEMENTUNDERTHERESILIENCEANDSUSTAINABILITYFACILITY—PRESSRELEASE;STAFFREPORT;ANDTHESTATEMENTBYTHEEXCECUTIVEDIRECTORFORJAMAICA InthecontextoftheStaffReportforthe2024ArticleIVConsultationandSecondReviewsUndertheArrangementUnderthePrecautionaryandLiquidityLineandArrangementUndertheResilienceandSustainabilityFacility,thefollowingdocumentshavebeenreleasedandareincludedinthispackage: PressReleasesummarizingtheviewsoftheExecutiveBoardasexpressedduringitsFebruary28,2024,considerationofthestaffreportthatconcludedtheArticleIVconsultationwithJamaica. TheStaffReportpreparedbyastaffteamoftheIMFfortheExecutiveBoard’sconsiderationonFebruary28,2024,followingdiscussionsthatendedonJanuary18,2024,withtheofficialsofJamaicaoneconomicdevelopmentsand policies.Basedoninformationavailableatthetimeofthesediscussions,thestaffreportwascompletedonFebruary12,2024. WorldBankAssessmentLetterfortheResilienceandSustainabilityFacility AStatementbytheExecutiveDirectorforJamaica TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. Copiesofthisreportareavailabletothepublicfrom InternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.orgPrice:$18.00perprintedcopy InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund JAMAICA PR24/61 IMFExecutiveBoardConcludes2024ArticleIVConsultationandSecondReviewsUnderthePrecautionaryandLiquidityLineandUndertheResilienceandSustainabilityFacilityArrangementswithJamaica FORIMMEDIATERELEASE Washington,DC–February28,2024:TheExecutiveBoardoftheInternationalMonetaryFund(IMF)concludedtheArticleIVconsultation1andSecondReviewsUnderthePrecautionaryandLiquidityLineandUndertheResilienceandSustainabilityFacilityArrangementswithJamaica. Overthelastyears,Jamaicahassuccessfullyreducedpublicdebt,anchoredinflation,andstrengtheneditsexternalposition.Ithasbuiltastrongtrackrecordofinvestingininstitutionsandprioritizingmacroeconomicstability,whichallowedJamaica'sresponsetorecentglobalshockstobeprudent,agile,andsupportiveofgrowth.Aftertwoyearsofrapidpost-pandemicrecovery,GDPgrowthisprojectedat1.7percentinFY2023/24,withtourismwellabovepre-pandemiclevelsandunemploymentfallingtoarecord-lowof4.5percentbymid-2023.Inflationisconvergingtothe BankofJamaica’stargetband,thoughitwasrecentlyimpactedbyanincreaseintransportprices,whoseeffectsareexpectedtodissipatetowardstheendoftheyear.ProjectedstrongtourisminflowsareexpectedtoresultinacurrentaccountsurplusforFY2023/24supportingasoundinternationalreservesposition.Thefinancialsystemiswellcapitalizedandliquid,andthepublicdebtcontinuestofall. TheoutlookpointstosustainedgrowthandinflationfallingwithintheBankofJamaica’stargetrangeamidsoundexternalandfiscalpositionsandfinancialsystemstability.Nonetheless,globalrisksremainhigh.Ariseinglobalriskaversionmayincreasefinancingcostsandlowerprojectedglobalgrowth,andregionalconflictscouldincreaseglobalcommodityprices.Finally,climate-relatedeventscouldweakeneconomicactivity.TheJamaicanauthoritiescontinuetoimplementsoundmacroeconomicpolicies,aidedbystrongpolicyframeworks.Supportedbybuoyantrevenuesand 1UnderArticleIVoftheIMF'sArticlesofAgreement,theIMFholdsbilateraldiscussionswithmembers,usuallyeveryyear.Astaffteamvisitsthecountry,collectseconomicandfinancialinformation,anddiscusseswithofficialsthecountry'seconomicdevelopmentsandpolicies.Onreturntoheadquarters,thestaffpreparesareport,whichformsthebasisfordiscussionbytheExecutiveBoard. strictcontrolofnon-wagespending,aprudentfiscalstancecontinuestosupportareductioninpublicdebttowardsthetargetintheFiscalResponsibilityLaw.TheBankofJamaicahasmaintainedanappropriatelytightpolicystance,anditsdatadependentmonetarypolicyiscounteringtheinflationaryimpulsefromastrongeconomicrecovery,tightlabormarkets,andglobalcommodityprices.ThispolicymixisplacingJamaicainagoodpositiontorespondtoshocks,counteractinflationarypressures,andsecuredebtsustainability. FollowingtheExecutiveBoard’sdiscussion,Mr.KenjiOkamura,DeputyManagingDirectorandActingChairoftheBoard,issuedthefollowingstatement: “JamaicahascontinuedtobuildastrongtrackrecordofinvestingininstitutionsandprioritizingmacroeconomicstabilitywithsupportofthePrecautionaryandLiquidityLineandtheResilienceandSustainabilityFacilityArrangements. “Soundfiscalandexternalpositions,entrenchedmacroeconomicstability,andsoundpolicyframeworkscontinuedtosupporteconomicgrowthandaprudentandagileresponsetoglobalshocks.InflationisconvergingtothetargetandasustaineddownwardtrajectoryofpublicdebtandreserveaccumulationareenhancingJamaica’scapacitytofaceadverseshocks.TheauthoritiesalsoremaincommittedtoSDDSsubscription. “Progresstoenhancefiscalpolicyframeworkshascontinued,includingtheoperationalizationoftheFiscalCommis