News and Updates | Economic Programme Oversight Committee (EPOC)

Gov’t on track to meet target under the PSBA — EPOC

Following their monthly meeting on March 14, the Economic Programme Oversight Committee (EPOC) is reporting that Jamaica is on target to meet monitored quantitative performance criteria and indicative targets under the Precautionary Standby Agreement (PSBA) signed with the International Monetary Fund (IMF) in November 2016.
The evaluation of Jamaica’s performance under the agreement was released in a recently published report by EPOC which outlined the economy’s progress at the end of January 2017.
According to the report, Jamaica’s fiscal and monetary performance remains strong with tax revenues surpassing expectations and Government expenditure being lower than anticipated.
“Given the trajectory, we believe that the GOJ will meet its quantitative targets and structural benchmarks at the end of March,” observed co-chair Keith Duncan.
The recently published report coincides with the launch of EPOC’s digital media platforms as they make an effort to increase public awareness about Jamaica’s economic performance based on the targets under the PSBA.
According to Duncan, the launch of EPOC’s digital media presence through a blog, Twitter and Facebook platforms is intended to make the information available at any time for Jamaicans.
“We are monitoring Jamaica’s plan because it is our plan for our economy and not the IMF’s, therefore we are cognizant that more persons consume information online, so we have chosen to meet them there,” said Duncan.
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Keeping our eye on the Primary Surplus

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Anyone who earns a monthly or weekly salary, and has a household to run, must consider all the regular bills that must be paid and all other expenses that must be met, even before they harbour any thought of saving or money for optional expenses, like entertainment.
The government is no different. Revenues from taxes, administrative services and other sources sum up the total earnings of the state; and strict accounting measures must be applied to determine the best money measures to pursue.
Fiscal accounts can be defined as what is left to service debt, after the government pits its revenue against its expenditure.
So, wages, social programmes spending, and general spending on maintaining the country, is taken out of revenues, and what is left is called the primary surplus.
Governments always have pre-set primary surplus targets and very few have managed to meet them. Under the current IMF agreement, the target for Jamaica’s primary surplus is 7 per cent of Gross Domestic Product (GDP). At the moment, Jamaica is set to meet this target at the next IMF review.
As explained by EPOC co-chair, Keith Duncan, there are several reforms that Jamaica must undertake, under the current arrangement. These changes include adjustments to the public sector wage bill, the system governing taxes and other critical monetary factors, all of which will push us towards our goal and meet the agreed primary surplus target.
“Our job at the EPOC continues to be to support the process of maintaining public awareness and to play an effective monitoring role. EPOC will continue to hold our Government accountable for this new economic programme, primarily as it relates to the fiscal and monetary policy commitments that we have made.”
EPOC is closely monitoring this target, as it is key to the overall performance of the nation, under the current programme.

March 2017: Update on 3-year IMF Precautionary Stand-by Arrangement (PSBA)

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The EPOC met on March 14, 2017, and reviewed available results as at January 2017. Based on performance at end-January 2017: Jamaica is on target to meet monitored quantitative performance criteria and indicative targets under the new Precautionary Stand-By Arrangement (PSBA) with the Government of Jamaica (GOJ), which was approved by the Executive Board of the International Monetary Fund (IMF) on November 11, 2016. This follows an IMF review conducted February 20 to March 3, 2017, for the performance to end December 2016. The IMF mission noted that PSBA is off to a strong start with programme conditions through December met.

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What Are The Targets Being Monitored By EPOC?

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The three-year Precautionary Stand-by Arrangement which commenced on November 11, 2016, is our Plan, it’s Jamaica’s Plan, it’s not the IMF’s plan – if we fail, the dire consequences impact us not the IMF.

The primary objective of this new Economic Programme is growth and job creation.

Embedded in this Macro Economic Framework Policy are three main planks:

Growth imperatives, commitments, measures and targets
Fiscal and Monetary targets
Public Sector Transformation

These Economic Reforms are monitored through Performance Criteria which are time bound deliverables monitored as Structural Benchmarks and Quantitative Performance Criteria

Example of a Structural Benchmark:

The submission of new rates and bands for Property taxes using 2013 valuations to the Cabinet in December of2016
Primary Surplus target of 7 percent maintained through the programme

The objectives of EPOC are to hold the government accountable to core elements of our Economic Programme, primarily the fiscal and monetary policy commitments that we have made.

Fiscal meaning the Revenue and Expenditure targets and most importantly the debt targets.

Secondly, Monetary Policy which is primarily focused around inflationary and Net International Reserve targets.

February 2017: Update on 3-year IMF Precautionary Stand-by Arrangement (PSBA)

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The EPOC met on February 7, 2017, and reviewed available results as at December 2016. Based on performance at end-December 2016, Jamaica has met, or is on track to meet, all 12 quantitative performance criteria and indicative targets under the new Precautionary Stand-By Arrangement (PSBA) with the Government of Jamaica (GOF), which was approved by the Executive Board of the International Monetary Fund (IMF) on November 11, 2016. The financial year to date at December 2016 represents the first IMF semi-annual review period under the PSBA.

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