The Caribbean country faces economic challenges and fiscal instability and in recent years has embarked on a path to improve its public finances and deliver stronger economic growth.

IDB vice president for countries Alexandre Meira da Rosa called the new financing agreement a credit to the efforts of Jamaica to carry out necessary reforms.

“We believe that Jamaica is about to turn the corner and harvest the results of its efforts. This agreement is the fulfilment of a commitment that IDB President Moreno and I made to minister Phillips last year, to walk hand-in-hand with Jamaica on the reform journey,” Meira da Rosa said.

In 2014, the government of Jamaica accepted an $80m loan from the IDB to help it reduce tax distortions, which had been hindering private investment, employment and competitiveness.

This latest loan will help Jamaica broaden the tax base, and continue correcting distortions in the tax system.

It will also strengthen Jamaica’s pension system, reforming the National Insurance Scheme to ensuring the state retirement fund is financially sustainable.

Jamaica’s finance minister Peter Phillips said: “The IDB has been a consistent partner in this programme of economic reform.

“We don’t always agree on everything, but when we don’t, we can discuss and emerge with an even stronger bond of collaboration and are better off for having these discussions.”