IMF happy with Jamaica progress but wary of wage rises

The International Monetary Fund (IMF) has noted Jamaica's "strong performance" in implementing it's Stand-By Arrangement, as officials conducted it's first review.

Another US$170 million is can now be accessed from the total of US$1.64 billion available over a 36-month period, mission chief for Jamaica Uma Ramakrishnan said.

The country hit all of its structural benchmarks and only missed one aspect of its performance criteria for this first report, she added.

An IMF Stand-By Arrangement stipules reforms of the recipient country, designed to guide it back to financial stability.

Faced with rising public sector wage bills, the IMF did highlight the need to preserve a will to reform – critical if Jamaica is to sustain gains to the economy.

The IMF advised the government to “carefully plan, manage and communicate upcoming public sector changes, especially in light of ongoing public sector wage negotiations”.

Minister of Finance Audley Shaw, in his budget presentations last month, indicated an estimated 2-3% increase in the salary of public sector workers.

Jamaica’s fiscal responsibility law allows for a wage bill of 9% of gross domestic product (GDP) by fiscal year 2018/19.

The proposed increase in public sector wages already pushes the budget over the required wage bill to GDP.