According to press reports, Jamaica is set to pass its ninth IMF test and should see upgrades from the major rating agencies, based on improvements to the economy, said Richard Byles, co-chair of the Economic Programme Oversight Committee (EPOC).
According to Byles, “recent economic news has been generally good, with the most important metrics performing according to plan or better, notably the primary balance, the current account, inflation and of course the debt/GDP ratio as a result of the debt buy-back.”
The PetroCaribe debt buy-back is “quite an event” he said, and will bring three major benefits to the country.
Firstly, the 10 per cent reduction in the debt/GDP ratio — “a major accomplishment and a major benefit to the country allowing Jamaica to achieve its March 2017 target twenty months early,” Byles said.
Secondly, the government stands to benefit from an increase in income through earnings from the PetroCaribe Fund.
Thirdly, “there will be a big rush of Jamaican dollar liquidity in Febuary,” bringing a reduction in interest rates.
Jamaica’s economy grew by 0.4 per cent from January to March.
“That is not as much as we’d want but not a bad performance, given all we know about the drought and so forth,’ Byles said.
Byles viewed the long drought as contributing to the drag on the economy thus stalling the country’s GDP growth figures.
“The drought is worse and has probably taken out at least 0.5 to 1.0 per cent of our GDP,” Byles reported told the Jamaica Observer.
Agriculture in Jamaica is very ‘harum scarum’ Byles said. “We need to move past that.”
On the breadbasket agricultural parish of St. Elizabeth, he said, “We need irrigation water at a price that is affordable. That is a low hanging fruit.”
“I don’t know how we can be serious about development in Jamaica if we can’t irrigate the breadbasket.”
The hotel and restaurant industry grew by 4.0 per cent during the first quarter, with construction at 1.3 per cent and mining at 0.6 per cent, but declines were recorded in electricity generation down by 2.8 per cent, agriculture down by 0.6 per cent and manufacturing down by 2.0 per cent.
Yvad Billings, Readers Bureau, Fellow
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