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IMF Staff and Jamaica Reach Broad Agreement on the Key Elements of US$1.3 Billion Loan
Press Release No. 09/467
December 17, 2009

Mr. Trevor Alleyne, chief of an International Monetary Fund (IMF) mission to Jamaica, issued the following statement today in Kingston:

“The Jamaican authorities and an IMF staff mission have reached agreement on the key elements of a program that the IMF would support with a loan under a Stand-By Arrangement (SBA). We will remain in close contact with the authorities over the coming days as they finalize their economic program in a Letter of Intent, which would then be reviewed by IMF management. The current timetable envisages that the IMF’s Executive Board would consider Jamaica’s SBA early in the new year. The SBA under discussion is for a SDR 802.5 million (about US$1.3 billion) over 27 months.

“The program’s main goal is to address the country’s economic imbalances and put Jamaica on a path of sustainable growth. The program with the IMF is also expected to catalyze significant additional financing from other international institutions.

“Jamaica has been hard hit by the global economic crisis, in particular through a sharp decline in bauxite and alumina output, a fall in remittances and a slowdown in tourism revenues. The economy is expected to shrink by around 3.3 percent in 2009.

“The program seeks to resolve the problem of an unsustainable debt position currently at over 130 percent of GDP and other weaknesses in the economy. Key to its success will be implementing a credible medium-term fiscal framework and a pro-active debt management strategy to put the debt-to-GDP ratio on a clear downward path.