KINGSTON, Jamaica— Overconsumption is the main cause of the island’s current economic woes, Gene Leon, representative of the International Monetary Fund to Jamaica, said on Sunday.
Addressing a forum on promoting Jamaica’s small- and medium-sized business, Leon said the country has been consuming far more than it has been able to earn, which leads to the dire condition of its balance of payments.
He underscored the need for all of the country’s stakeholders to collectively address the issue to improve the economy which is strangled by debts that have reached 140 percent of its gross domestic product.
Jamaica used $6.5 billion to import goods, while it earned only $1.7 billion from exports in 2012, according to figures released by the Statistical Institute of Jamaica.
Leon, however, commended the government led by Portia Simpson Miller on the latest initiatives it has adopted to reform the economy. He stressed that efforts to fulfill conditions for a standby loan from the International Monetary Fund represented a “blueprint” for efficient economic change, and a “map” for the way forward.
The Jamaican government has committed to reducing the national debt to 95 percent of GDP in the next seven years by slashing discretionary tax waivers, lowering public sector wages and reconstructing debt.
Last week, the IMF announced it has recommended a $958 million loan support package, $200 million more than originally requested.
The increase follows “the successful implementation of all the prior actions required of the Caribbean island,” the IMF said.