However, the IMF has noted that the deal will not be inked before next year.

"The current timetable envisages that the IMF's executive board would consider Jamaica's SBA early in the new year," said Trevor Alleyne, chief of an IMF mission to Jamaica, in a statement issued yesterday.

"The Jamaican authorities and an IMF staff mission have reached agreement on the key elements of a programme that the IMF would support with a loan under an SBA," Alleyne said.

"We will remain in close contact with the authorities over the coming days as they finalise their economic programme in a letter of intent, which would then be reviewed by IMF management," added Alleyne.

He said the main goal of the programme is to address Jamaica's economic imbalances and put the country on a path of sustainable growth.

Global economic crisis

According to Alleyne, the programme with the IMF is also expected to catalyse significant additional financing from other international institutions.

"Jamaica has been hard hit by the global economic crisis, in particular through a sharp decline in bauxite and alumina output, a fall in remittances and a slowdown in tourism revenues. The economy is expected to shrink by around 3.3 per cent for 2009.

"The programme seeks to resolve the problem of an unsustainable debt position currently at more than 130 per cent of GDP and other weaknesses in the economy," said Alleyne. "Key to its success will be implementing a credible medium-term fiscal framework and a proactive debt-management strategy to put the debt-to-GDP ratio on a clear downward path."

He pointed to the commitment of the Bruce Golding administration to introduce a coordinated set of fiscal reforms to strengthen public finances, including new fiscal responsibility legislation, a reform of public enterprises and public-sector employment; and provisions to make the tax structure more efficient.

"Measures could include a mixture of controls on public-sector salaries, some tax increases, as well as cuts in other spending," Alleyne said.

The IMF team left the island yesterday after extensive talks with the Government.