IMF Executive Board Approves a US$ 415 Million Disbursement to Jamaica to Address the Impact of Hurricane Melissa

The Executive Board of the International Monetary Fund (IMF) approved a disbursement in the amount of 306.32Mn in Special Drawing Rights (SDR; equivalent to about US$415Mn, 80% of quota) for Jamaica under the Rapid Financing Instrument’s (RFI) large natural disaster window.
These resources will help meet the urgent balance of payment needs stemming from the devastation caused by Hurricane Melissa, complementing the resources currently available under Jamaica’s disaster risk financing framework.
Jamaica’s established track record of economic reforms has created buffers that are helping to address the economic fallout and reconstruction needs after Hurricane Melissa. Nevertheless, the widespread damage caused by the hurricane, together with the resulting fiscal pressures and sharp decline in tourism receipts have generated a sizable balance-of-payments need in the short term.
The IMF also noted that the Government of Jamaica is committed to supporting the most vulnerable segments of the population in hurricane-hit areas and rebuilding damaged infrastructure. While recognising that the hurricane shock justifies a temporary easing of the fiscal stance, the authorities remain committed to fiscal responsibility and debt reduction once the hurricane shock has receded.
The authorities also continue to prioritise achieving their inflation target and ensuring financial stability. Deputy IMF Managing Director and Chair, Bo Li, says the emergency assistance under the Rapid Financing Facility will help to support relief efforts, particularly for the most vulnerable, and accelerate the recovery. He also noted that with severe damage to agriculture, the hurricane has caused a significant negative supply shock, which is creating inflationary pressures; however, the Bank of Jamaica’s commitment to its inflation target remains essential to anchor inflation expectations and contain second-round effects.

(Source: IMF)