7% Primary Surplus Target Still Key in New IMF Agreement

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The Primary Surplus target of seven-percent of Gross Domestic Product will remain a key component of the new Precautionary Stand By Arrangement, SBA with the International Monetary Fund.

That’s according to IMF Mission Chief to Jamaica, Uma Ramakrishnan. She was speaking at a Press Conference at the Bank of Jamaica today.

The seven percent Primary Surplus Target, represented billions of dollars that the government put towards paying its debt under the now defunct Extended Fund Facility, EFF.

Ms. Ramakrishnan says the target will remain in place for the next three years as debt reduction is still a key plank of the new arrangement.

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A high Primary Surplus target has been blamed for a lack of capital investment and is said to be a major hurdle to growth.

However Ms. Ramakrishnan says the target is an important measure in fiscal discipline

She says growth should be private sector led.

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Some adjustments will be made under the new IMF programme.

Ms. Ramakrishnan says the Fund will now assess Jamaica’s economic performance twice per year rather than quarterly.

The first review is expected to be done in March of next year.

Ms. Ramakrishnan says a new monitoring policy will also be put in place to focus on the inflation rate.

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Ms. Ramakrishnan reiterates that the new Standby arrangement is a vote of confidence in the fiscal policy of the government.

Chevon Campbell for Nationwide News.

Meanwhile, Ms. Ramakrishnan says the new Standby Arrangement will ensure that the government remains on the path of fiscal discipline.

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