Jamaican firms’ confidence in the country’s investment climate improved over the second quarter, catalysed by the signing of the International Monetary Fund (IMF) agreement and what appears to be a shift in economic policies.
The Jamaica Chamber of Commerce (JCC) Conference Board reported on Wednesday that businesses, while not anticipating any quick economic turnaround, or even improved profitability, had a positive vibe about the ongoing shift in economic policies that favours competitiveness, productive investments, and exports.“The mix of policies is expected to restrict federal spending, boost tax payments, promote worker productivity, and authorise greater deregulation,” said the report of the survey conducted by Market Research Sevices, a Kingston-based company headed by renown pollster, Don Anderson.The Index of Business Confidence was 101.4 in the 2nd quarter 2013 survey, up from 95.0 in the 1st quarter and 91.8 in the 2nd quarter of 2012. The survey was conducted between the end of April and June 20, around the time the IMF deal was approved.Anderson made note of the ‘IMF bounce’, highlighting that the previous time he surveyed businesses, it was a period of great uncertainty. Jamaica will get nearly US$2 billion in loans over the next four years from the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank (IDB) under the Extended Fund Facility approved by the IMF on May 1.“The uncertainty surrounding the IMF agreement fed into a feeling of malaise,” Anderson said at a press conference.“Although they thought there would be an IMF agreement, they didn’t know when it would be finalised. Now they are slightly more positive now as they know with a greater degree of certainty what they are up against, and can plan better,” he continued, noting that “businesses are saying ‘Now there is an IMF agreement, I can make a positive conscious decision about what to do’”.The 2nd quarter survey was actually the first in two years in which more firms thought it was a good time to invest rather than responding that it was better to decrease their investments to cut their exposure to a faltering economy. According to the report, when asked about future prospects for investments, 43 per cent of companies said it was a good time to invest to benefit from a strengthening economy, well above the prior quarter’s 35 per cent or the 31 per cent over the comparative period in 2012.While businesses have a long-term outlook, consumers are more interested in “instant gratification”, noted Anderson, explaining why the overall level of consumer confidence remained largely unchanged, near the lowest levels recorded during the past decade.“They know things are going to continue to be difficult and aren’t able to look down the road like businesses,” Anderson said about consumers.The consumer confidence Index was 99.7 in the 2nd quarter 2013 survey, barely different from the 99.9 recorded in the 1st quarter, although significantly below the 111.0 recorded a year ago.Jamaica Chamber of Commerce (JCC) President Francis Kennedy (right) makes a point in discussion with pollster Don Anderson and Nadienne Neita, National Commercial Bank’s assistant general manager, corporate banking division, during the presentation of the JCC Conference Board’s business and consumer confidence survey. (PHOTO: ASTON SPAULDING)View the original article here
Business confidence gets "IMF bounce"
