The Government will begin negotiating a new agreement with the International Monetary Fund (IMF) as early as next month, says Finance Minister Dr Peter Phillips.

Negotiating a new IMF deal is a key priority of the Portia Simpson Miller-led administration which swept into power less than a month ago, and Phillips announced yesterday that preliminary talks with an IMF delegation over the last week have set the foundation for that goal to be accomplished.

“We have mapped plans for continuing discussions with the IMF mission with a view to ultimately begin negotiations in the not too distant future and conclude as best as we can a set of understanding and an agreement on a programme,” Phillips told journalists at a press conference in the finance ministry’s executive boardroom.

Outlining the desired timeline going forward to reach a new IMF agreement, Phillips said that after next week’s Cabinet retreat he will lead a team to Washington to meet with officials of the fund and other multilaterals, after which he expects an IMF mission to return later in February to undertake a more detailed analysis and hopefully begin negotiations for a new programme with the country.

Phillips said that both the IMF and Government agreed during the recent talks that the challenges faced by the country, in the face of worsening fiscal accounts and a slowdown in the global economy, needed to be addressed urgently.

“At heart we recognise that there has been a worsened fiscal situation in the near term and that there are significant weaknesses in our economic position in the medium term which has increased significantly Jamaica’s vulnerability to economic shocks,” he noted.

Phillips added that the Government is determined to get key reform programmes underway as fast as possible, including measures related to taxation, pension and the public sector wage bill.

“We think getting these reforms on the way is a matter of some urgency because the problems in the global economy exist now, our fiscal accounts are worsening now and we have to take control as fast as we can,” declared the finance minister.

The IMF revised its 2012 global growth forecasts downward by 75 basis points on Monday to 3.25 per cent, slower than the four per cent pace it projected in September. Luis Brewer, head of the IMF delegation that visited Jamaica, noted that the country faces a daunting challenge against the background of the international economic uncertainties coupled with the country’s high debt and low growth profile.

“I think we have made significant progress in the sense that we have a common view of the significant challenges that Jamaica faces in the context of an international economy that is in a dangerous state,” said Brewer.

“I think Jamaicans have a very clear idea of where they stand and how they should proceed to advance in this very uncertain and volatile (time),” added the IMF executive.

The previous Jamaica Labour Party administration approached and got a US$1.23-billion stand-by agreement with the IMF in 2010. However, it was heavily criticised by the then Opposition for not meeting the targets set by the lending institution.

Phillips, then the Opposition spokesman on finance, had said that if his People’s National Party were returned to office it would renegotiate the agreement.