JLP does not foresee a return to IMF
CAMPAIGN spokesman for the Jamaica Labour Party (JLP) Dr Nigel Clarke says should his party return to Government on September 3, he does not foresee a return to the International Monetary Fund (IMF) given current projections for the economy to contract by 10 per cent.
Clarke, who was speaking at a JLP press conference yesterday, said based on the budgetary performance to date and the country’s reserve, there is no need for a move in that direction.
The finance minister said that the country entered into the novel coronavirus pandemic in a strong position, with cash reserves of $87 billion that the Government could draw on.
He said the reserves were used to shore up the Government.
“We had built up over US$1 billion of reserves in our central bank that were non-borrowed and that provided us with a great degree of strength. We had put money aside in a contingency fund that we could draw on. And, we were able to quickly access resources from the IMF in their rapid financing instrument, and based on our track record of performance those funds came very very quickly,” said Clarke.
He explained that countries enter into an agreement with the IMF either for budgetary support or reserve support.
With respect to Jamaica’s budgetary support, he said the Government continues to do well with revenues running ahead of target for the first four months of the year.
As for the reserves, Clarke said, even in the middle of the pandemic the country has more gross reserves in the central bank than there has ever been in history.
“Reserves of $3.7 billion in the middle of the worst crisis ever to hit Jamaica, when the economy is expected to decline by 10 per cent we have more reserves than at any point in our history. In addition to that, our net international reserves, when you express those reserves in terms of weeks of imports of goods and services, those reserves, again, are at the highest level ever in our history.
“So on both counts, whether budgetary or reserves, we are in a position that any objective person will say that that need does not appear to be necessary,” said Clarke.
