INTERNATIONAL Monetary Fund (IMF) resident representative in Jamaica Dr Bert Van Selm on Tuesday downplayed a view that the island should adopt the developed world approach of pumping money to stimulate the economy.

“We are in a different situation here in Jamaica than in the advanced economies,” stated Van Selm in response to a query following his presentation at the seminar ‘Unlocking Investment Opportunities in Jamaica’ put on by financial conglomerate Sagicor Group at the Jamaica Conference Centre in Kingston.

His presentation focused on the island achieving 2.0 per cent growth in 2015 and 2.5 per cent growth over the medium-term spurred on in part by private investment. However, a question from the floor asked why the absence of monetary policy geared at stimulating the Jamaican economy is beset with reduced consumption and IMF-sanctioned currency depreciation.

He explained that “quantitative easing or bringing more money into the economy” was used as a sort of “last resort” when a central bank had already reduced its interest rates to nearly zero and still remained worried about deflation.

“That is what happened in the United States, Japan and also now in Europe. Jamaica is a completely different situation, deflation is nowhere a threat here — yes, inflation is coming down, but you are nowhere near deflation, so that is a critical difference. Also, interest rates are not at zero. So from a monetary point of view we are in a different situation here in Jamaica than in the advanced economies,” he responded.

The Jamaican economy has suffered from one per cent growth on average over the last 40 years, with each decade defined by its own crisis. But Van Selm stated that the economy would achieve 2.0 per cent growth in 2015 based on increased growth prospects from the USA, the island’s major trading partner; and reduced growth in China which would reduce commodity prices including oil and therefore costs to the island. He also indicated that the island’s rise in the renowned Doing Business report to top the Caribbean would be a fillip to foreign direct investment.

“I will try to convince you these are real [growth] projections and not a pie in the sky,” he said.

Jamaica last week received preliminary approval from the IMF for its seventh review. “All quantitative performance targets and structural benchmarks for the December 2014 quarter were met; however, the indicative target on tax revenue was narrowly missed,” the release on the review indicated. An IMF mission visited Jamaica from Monday, February 16, to Tuesday, February 24, to conduct the review of Jamaica’s performance under the Extended Fund Facility (EFF). As part of the review, the IMF consulted with Government officials, technical staff and key stakeholders, including the private sector.