IMF Approves $520 Mn Emergency Loan For Jamaica

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IMF on Friday approved a $520 million loan for Jamaica to help the island nation deal with urgent needs raised by the COVID-19 pandemic.

The shock of coronavirus came after the country successfully graduated from an IMF-supported reform program, but is now hit by the need for emergency spending amid a travel shutdown, the Washington-based crisis lender said.

"Despite the authorities' best efforts, the pandemic is severely impacting the Jamaican economy, as a sudden stop in tourism and falling remittances are generating a sizable balance-of-payments need," IMF Deputy Managing Director Tao Zhang said in a statement.

The money will come from the IMF's Rapid Financing Instrument (RFI), which allows nations to circumvent the lengthy negotiations usually needed to secure a full economic assistance program -- time most countries do not have as they struggle to cope with the coronavirus crisis.

The government of the Caribbean nation, which has seen just over 500 cases and nine deaths from the coronavirus, according to the World Health Organization, declared the entire island a disaster area and established a special task force to coordinate the pandemic response and recovery efforts.

But without vital tourism revenue, the IMF projects the economy will contract 5.6 percent this year, although Zhang cautioned that the "outlook remains subject to an unusually high degree of uncertainty."

He said the funding also will "catalyze additional support from other international financial institutions and development partners."