Will the IMF approve or deny Jamaica’s latest loan application?

Late last year the Government announced that it would be going back to the IMF for a new loan and a line of credit. These are the Resilience and Sustainability Facility and the Precautionary and Liquidity Line. 

The Resilience and Sustainability Facility would allow Jamaica to borrow up to US$763 million with an interest rate of just 3.8%.  We have 20 years to repay, and there’s no principal payment for the first 10 years.

Finance Minister Nigel Clarke said the Government would use that loan to help pay off external debt that will be maturing soon.

The other facility is called PLL, Precautionary and Liquidity Line.  This is a billion dollar line of credit to offset the impact of risks such as extreme weather. And we all know the Caribbean is prone to extreme weather like hurricanes.

Cut to last week, when a team from the IMF visited the island to go over everything the country is doing to make sure that we qualify for the loans. Remember the IMF always has some serious rules and regulations about what we need to do in order to borrow money. 

Well, let’s just say Jamaica passed with flying colours. 

According to the IMF, the Government is making good progress in implementing its policy agenda under the PLL. 

The bank said Jamaica “overperformed” on targets.  Especially on international best practices for anti-money laundering/combating the financing of terrorism. And the adequacy of the country’s data also improved. 

They also highlighted that Jamaica’s international reserves continued to rise.  The reserves are money that the central bank keeps on hand for emergencies. 

The IMF also pointed out that Jamaica’s economic growth for financial year 2022/23 is estimated at around 4%. And that’s due to the strong rebound of tourism and the reopening of one of the Jamalco alumina plants.

And even though remittances have been fluctuating, it still played a huge role in offsetting costs. Plus the public debt has continued to fall.

So all in all, the IMF gave us two thumbs up and said the country is doing what it needs to do to stay in its good graces. 

Now, the IMF’s Executive Board is set to consider Jamaica’s loan applications in August, when they’ll either approve or deny the request. So, we’ll have to wait and see what they said.