The government received approval from the IMF after the international lender concluded its seventh quarterly review on the country’s economic performance under its Extended Fund Facility.

It observed that economic programmes in Jamaica, aimed at boosting growth and employment, were starting to yield ‘tangible dividends’.

Inflation is expected to fall to around 5% due to both declining oil prices and a reduction in macroeconomic imbalances, the fund said. At the same time, improved competition and growing confidence are expected to stimulate demand and increase economic activity to just over 2% in the next financial year.

IMF mission chief Jan Kees Martijn said Jamaica’s programme was on track and policy implementation remained strong. However, ‘the indicative target on tax revenue was narrowly missed’, he said.

The government has release detailed information on income and spending in its latest draft budget due to come in before end-March 2015. This is the first time that a budget will come in ahead of the new fiscal year.

According to the IMF, the government has allowed room for additional spending, in particular on medication and medical supplies. Funding for this is expected to come through revenue mobilisation. The government also intends to maintain the wage bill, provide for contingencies to ensure 7.5% of gross domestic product balance, and protect social spending.

‘This fiscal disciple, impressive by international standards, remains key to lowering Jamaica’s still very high public debt ratio,’ Kees Martijn said.

‘But sustaining this fiscal position over the medium term will require further steps to strengthen revenue administration, broaden the tax base, and improve public sector efficiency.’