WASHINGTON, Feb 15 (Reuters) - The International Monetary Fund said on Friday it had reached a preliminary agreement with Jamaica on a $750 million loan program to help the Caribbean country carry out reforms.
“Over the last three decades, the Jamaican economy has experienced very low economic growth, declining productivity, and reduced international competitiveness,” Jan Kees Martijn, head of the IMF mission to Jamaica, said in a statement.
“An important factor behind these problems has been Jamaica’s unsustainable debt burden, which has undermined confidence and elevated risks to economic stability,” he said.
Jamaica’s high debt service payments also have limited the government’s ability to provide services needed to achieve sustained rates of growth, the IMF said.
The IMF Executive Board is expected to vote on the package by the end of March, subject to the Jamaican government taking a number of steps and obtain necessary financing assurances.
“The authorities have announced a debt exchange that, along with the fiscal adjustment and structural reform measures in the economic program, will help reduce Jamaica’s medium-term financing needs and contribute to debt sustainability,” Martijn said.
The success of that program “will depend critically on a high rate of participation of private creditors in the debt exchange,” he added.