All Macro-Economic Targets Met, says EPOC

The Economic Programme Oversight Committee (EPOC) says all 7-government macro-fiscal structural benchmarks through the month of June have been met.

It also says all 14-structural benchmarks for public sector transformation, public bodies and public service reform for the period have been met.

EPOC says based on the preliminary findings, Jamaica is on track to meet the targets for the quantitative performance criteria and indicative targets for the IMF Precautionary Stand-By Arrangement for the period.

However, in a communique this month, EPOC says it’s concerned that inflation which is currently at 2.8 percent remains below the four to six percent target set by the Bank of Jamaica.

It says the Central Bank expects inflation to remain below this target till December.

EPOC says this would trigger a consultation with the IMF’s Executive Board.

The Bank will then be required to explain in writing the rationale for the deviation and planned corrective actions.

It says a low inflation out-turn can be received as positive, but has implications for Programme targets.

These include fiscal targets linked to Nominal GDP such as the Debt to GDP targets and the 9-per cent Wage to GDP Fiscal Rule.

In the meantime, the Bank of Jamaica lowered the policy rate to two-percent, effective June 28, 2018.

It says this was done in response to projections that inflation will remain below its
target.

The Bank of Jamaica says the decision to loosen the policy stance is aimed at fostering greater credit expansion and a faster pace of GDP growth.

It says this will support inflation returning to the targeted four to six percent.

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