Jamaica: Fifth Review Under the Extended Fund Facility and Request for Modification of Performance Criteria-Staff Report; Press Release

EXECUTIVE SUMMARYRecent data show a gradual economic recovery, with growth projected to reach just over1 percent in 2014/15. Inflation has trended down to about 8 percent.The program is on track. Jamaica's four-year, SDR 615.38 million (225 percent of quota)Extended Arrangement under the EFF was approved by the IMF Executive Board on May 1,2013, and the first four reviews under the program were completed on schedule. All end-June 2014 quantitative performance criteria were met. The structural benchmarks for end-June were also met. Based on the strong performance to date and the authorities' updatedpolicy intentions and commitments, staff recommends completion of the fifth review underthe extended arrangement.Focus of the review. Discussions centered on the preparations for the 2015/16 budget andfinancial sector reforms. The program has been updated, with steps to support theambitious fiscal goals by strengthening tax administration, enhancing public financialmanagement, and containing the civil service wage bill. Further steps have been articulatedto move ahead the reform of the securities dealers sector and to strengthen the financialsystem more broadly.Progress in implementing the authorities' program is steadily advancing with everysuccessful review, but risks to the program remain relatively high. A delayed growthrecovery could undermine social support for the reform efforts, financial sectorvulnerabilities could become more pressing, or risks to external financing (including fromPetroCaribe) could crystallize. A further challenge will be to keep the budget on track inthe face of risks to revenues and the wage bill.