KINGSTON,- Jamaica's gross domestic product (GDP) is projected to grow 1.5 percent this year as confidence returns with the loan package approved by the International Monetary Fund (IMF), the country's central bank said Thursday.The first disbursement of 207.2 million U.S. dollars is already "providing a boost to confidence in the domestic economy," said Brain Wynter, governor of Bank of Jamaica.
"Continued improvement in confidence is anticipated with the strengthening in foreign currency flows to the economy, particularly the approximately 2 billion U.S. dollars in multilateral loan and grant inflows over the medium term," he added.
The IMF approved a four-year loan plan of 932 million dollars for Jamaica early this month, which was part of a 2-billion-dollar package from the IMF, the World Bank and the Inter-American Development Bank aimed at supporting a set of reforms for the debt-swamped Caribbean island nation.
The disbursement has replenished Jamaica's Net International Reserves (NIR) to 997.3 million U.S. dollars, according to Wynter.
The country's NIR, which had plummeted to a historical low of 884.3 million U.S. dollars at the end of March, "is expected to continue to increase gradually over the fiscal year due to growth in multilateral inflows as well as incremental improvements in net private capital flows," he said.
The uncertainties that buffeted the foreign exchange market during the first quarter this year also appear to be subsiding as players are reassured of the government's commitment to achieving sustainable debt and fiscal ratios.
"This, together with market expectations of increased foreign currency inflows and the liquidity effects of the longer-tenor instruments introduced by the central bank, has led to an appreciation in the exchange rate since mid-April," Wynter said.
"These developments are expected to lead to a gradual recovery in domestic economic activity and per capita income over the near to medium term," he added.
