KINGSTON – Jamaica has aced the second International Monetary Fund (IMF) quarterly test despite unplanned expenditure related to the west Kingston incursion and emergency spending in the health sector.Local officials have been forced to tweak the Letter of Intent with the IMF to reflect the additional spending.That revised Letter of Intent was expected to go before the IMF Board of Governors at the end of September for approval, but already the fund has indicated a willingness to accept the proposed changes.“The IMF has demonstrated that its position is not one that is static, but it has the capacity to be responsive to changing needs,” Finance Minister Audley Shaw announced on Friday.Shaw was supported by Trevor Alleyne, head of the IMF missionto Jamaica, who noted that the revised Letter of Intent would need the approval of the Jamaican government and the IMF executive board, which was scheduled to meet at the end of September. But Alleyne noted that the unplanned expenditure had not prevented Jamaica from passing the latest quarterly test.After a more than week-long visit to the country by an IMF team, Alleyne said the targets for the second quarter under the US$1.3 billion standby agreement had been met.“Strong [General Consumption Tax] collections, reflecting improved tax administration efforts, and the continued cautious execution of expenditure were key to meeting the primary surplus target. The exchange rate has stabilised at an appreciated level and the [Net International Reserves] floor was exceeded by a large margin,” Alleyne said.He added that local authorities had prepared amendments to strengthen the effectiveness of the fiscal responsibility framework; drafted a public sector master rationalisation plan; started implementing tax administration reform; and made further progress in the divestment of public enterprises.Alleyne said based on the performance of the economic programme, the mission would recommend that the IMF executive board complete the second review of the borrowing arrangement which would result in the disbursement of JAM$4.1 billion (BDS$92.8 million).(Jamaica Gleaner)
