The International Monetary Fund (IMF) says Jamaica’s debt is 140 per cent of gross domestic product (GDP), 10 percentage points worse than the figure used by the Government, and has warned that it could climb to a Greek-like 150 per cent, or higher, in the medium term if the Simpson Miller administration fails to push through tough fiscal reforms. In this scenario, growth could limp along at one per cent a year. At the same time, the Fund’s executive directors stopped just short of an open rebuke of the former Jamaica Labour Party Government for failing to make good use of the opportunity provided by the rescheduling of J$702 billion of domestically held debt two years ago to begin a fundamental assault on the debt crisis.
“They regretted that the successful debt exchange under the 2010 standby arrangement (under which the IMF loaned Jamaica US$1.2 billion) had not been accompanied by fiscal consolidation to put Jamaica’s public debt on a sustainable downward path,” the IMF said in its assessment of a report by the Fund’s staff of the Jamaican economy.
