WASHINGTON, June 8, 2017- The World Bank Board of Executive Directors today approved a US$70 million Development Policy Loan to support Jamaica’s efforts to improve the investment climate and sustain fiscal and public financial management.
“We welcome this boost toward the continued improvement of Jamaica’s fiscal management and competiveness,” said Jamaica’s Minister of Finance and the Public Service, Audley Shaw. “Jamaica has made significant strides under the current Stand-By Arrangement, demonstrating our commitment to the macroeconomic, structural and debt sustainability reforms under the Arrangement. The government’s tight fiscal policy and commitment to sound macroeconomic policies have also served to inspire investor confidence, which now stands at an all-time high, amid stronger net foreign direct investment inflows and a steady increase in employment.”
The reforms adopted by the government since 2013 have succeeded in stabilizing the economy and reducing debt. Jamaica’s economy is showing signs of a modest growth acceleration. GDP grew by 1.4 percent in 2016 - up from 1.0 percent in 2015 and 0.7 percent in 2014. Employment is rising and inflation has dropped to the historically low level of 2.3 percent in 2016 (period average). The 2016 - 2017 Global Competitiveness index also ranks Jamaica 75th out of 138 countries, a significant improvement from 86th in 2015.
“Jamaica’s sustained and strong commitment in implementing an ambitious economic reform program has led to the country’s positive economic performance. The economic outlook remains favorable and is expected to continue to improve with the authorities’ staying the course on the reform program. World Bank remains Jamaica’s longstanding partner with the new financing aimed at boosting competitiveness and enhancing fiscal sustainability,” said Tahseen Sayed, World Bank Country Director for the Caribbean.
Specifically, this financing support efforts to increase economic competitiveness through reforms that make Jamaica’s special economic zones more attractive to investors, reduce customs clearance times, diversify sources of electricity generation, and upgrade building and construction standards. In addition, it will help the Jamaican government to ensure fiscal sustainability through stronger systems for debt management, fiscal risks assessment, and public investment management, as well as through placing public servants’ pensions on a sound financial basis for the long term.
This financing builds on the reforms supported under previous Development Policy Loans to Jamaica, and is part of a large package of financial support from the International Monetary Fund (IMF) Stand-By Arrangement, the World Bank and the Inter-American Development Bank (IDB), with the objective of boosting economic growth while maintaining fiscal prudence.
This loan, from the International Bank for Reconstruction and Development (IBRD) to Jamaica, has a final maturity of 25 years, with a 5-year grace period.
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