The International Monetary Fund, IMF, has stated that Jamaica is expected to see about 4.3 percent economic growth, this year.

This after the IMF Executive board concluded its 2021 article 4 consultation with Jamaica.

In a statement, the IMF said Jamaica was hit hard by the Covid pandemic.

It said an early lock down in 2020 helped contain the number of Covid-19 cases but the impact on the economy was severe, with real GDP shrinking by 10 percent.

To counter the social and economic effects of the pandemic, the government temporarily reduced the fiscal balance target, as well as increased spending on health and social protection, and also reduced the vat rate.

The IMF said that while growth is expected to rebound to 4 point 3 percent in 2022, the downside risks to the outlook are significant, notably from covid-19.

It said renewed Covid-19 waves in Jamaica, or abroad, could lead to a more prolonged disruption of tourism, trade, and capital flows.

Another risk is posed by the uncertain duration of global inflationary pressures, which have boosted inflation to well above the central bank’s target range of 4 to 6 percent.

The IMF said the near-term policy priority is to protect lives and livelihoods, while preserving macro–economic stability.

Over the medium term, there is a need to rebuild buffers, safeguard debt sustainability, and prioritize structural reforms that reduce poverty and boost potential and inclusive growth.

The IMF is encouraging the Jamaican government to address supply-side constraints to growth, through well-prioritized structural reforms, aimed at boosting competitiveness and resilience, including through digital transformation.

It also highlighted the need to strengthen education and training, upgrade infrastructure, reduce crime, and build resilience and adaptation to natural disasters.