A US$100-million loan from the Inter-American Development Bank (IDB) will support the Government of Jamaica’s fiscal management as the country recovers from the health and economic crisis occasioned by the novel coronavirus pandemic.

According to the IDB, this disbursement is the second tranche under the Programmatic Policy-Based Loan modality, which it approved in March 2021. While the two loan installations are “technically related”, they are however “financially and contractually independent operations”.

“The new loan will ensure the availability and timely execution of public resources to address the health crisis caused by the pandemic. It will also strengthen the counter-cyclical effect of fiscal policy with the temporary introduction of measures to protect the income of vulnerable households and increase business liquidity,” the hemispheric bank explained.

Specifically, the loan operation will target improving the reach of social programmes, accelerating the recovery of the tourism sector, and the implementation of a tax credit programme for micro, small and medium-sized enterprises.

“The IDB financing will also support reforms to boost economic and fiscal recovery in the post-pandemic period, including the creation of an independent fiscal commission to oversee the government spending and improvement in governance and gender representation [on] all boards of public bodies and in the climate-related government spending, among other measures,” the bank outlined.

Consistent with Vision 2025 — Reinvesting in the Americas: A Decade of Opportunities, the IDB operation aims to achieve economic recovery and encourage inclusive growth in Latin America and the Caribbean in areas such as small and medium-sized enterprises, gender and inclusion, and climate change.

With a payback period of 20 years, the loan has a grace period of 5.5 years.