PSOJ supports Gov't decision to access IMF fundingTuesday, April 21, 2020
KINGSTON, Jamaica — The Private Sector Organisation of Jamaica (PSOJ) says it strongly supports the Government's “prudent and proactive strategy” to access the International Monetary Fund (IMF) Rapid Financing Instrument (RFI).
The IMF's RFI is available to all member countries facing an urgent balance of payments need, without having a full-fledged programme in place, ongoing reviews or conditionalities.
The PSOJ said the COVID-19 pandemic has already had a negative impact on the country and noted that Jamaica will continue to experience a sharp decline in foreign exchange earnings (FX).
“Tourism is a key economic driver and is one of Jamaica's primary earners of foreign exchange. For fiscal year 2018/19, the overall US$3.2 billion visitor expenditure accounted for approximately 36 per cent of Jamaica's foreign exchange inflows,” the PSOJ said in a recent press release.
“With a halt in the industry due to the COVID-19 virus spread and an anticipated reduction in remittance, the country's FX earnings will be negatively impacted which would be offset by lower imports and reduced prices for oil,” the organisation continued.
The PSOJ noted that remittance inflows of US$2.7 billion contributed to 30 per cent of total flows for the fiscal year 18/19.
The organisation added that this reduction in FX will put pressure on the country's external accounts and consequently the Net International Reserves.
“The Government's request to access the IMF RFI should help to mitigate or cushion the impact of the open-ended nature of the pandemic and its economic spillovers which pose a significant risk to Jamaica's balance of payments which could reverse the macroeconomic stability achieved over the past seven years,” the PSOJ said.
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