Updated at: 10/01/2013 8:05 PM
By DAVID McFADDEN
(AP) KINGSTON, Jamaica - Jamaica’s top finance official said Tuesday that the government "comfortably" met conditions set by the International Monetary Fund to pass the first performance review of a $944 million loan program despite major challenges.
In a speech in Parliament, Finance Minister Peter Phillips told lawmakers that the four-year program’s front-loaded adjustments and reforms are designed to restore economic growth to Jamaica and place debt on a "firm downward path."
Debt sustainability has long been a goal on the island. Overall, the Caribbean nation’s towering debt is roughly 142 percent of gross domestic product, one of the most punishing debt-to-GDP ratios in the world. For years, roughly half of government spending has gone to paying debt.
Unemployment is over 14 percent and the Jamaican dollar has steadily lost value. The current exchange rate is just over 100 Jamaican dollars to one U.S. dollar. Twenty years ago, it was 27 Jamaican dollars to one U.S. dollar.
Phillips said the government believes chances are good that real GDP growth "will return on a sustained basis."
He said he could confidently forecast that the island will pass its second IMF review in coming weeks. A team of evaluators from the Washington-based agency is expected in Jamaica in November.
In a statement, the IMF said Jamaica has so far done a good job of implementing fiscal policies under the loan program and various reforms were progressing.
The government has plans to simplify the tariff structure and introduce a broad system of tax credits that will replace current sector-specific incentives.
On Monday, the IMF board cleared the way for Jamaica to receive a roughly $30 million disbursement. Its approval opened up tens of millions in supplemental support from other development partners such as the World Bank.
The country’s current loan program with the IMF was finalized in April. A previous one forged in 2010 under another administration fizzled out after the government failed to meet performance criteria.
David McFadden on Twitter: http://twitter.com/dmcfadd
(Copyright 2013 by The Associated Press. All Rights Reserved.)