Caribbean & Central America - January 2024

Prime Minister Andrew Holness ended the year by hailing Jamaica’s good economic performance, highlighting strong growth, low unemployment, and healthy public works programmes including road improvements and residential home building. Investors are particularly impressed by reductions in the debt burden.

Earlier, the Planning Institute of Jamaica (PIOJ), a government office, had reported third quarter year-on-year GDP growth of 1.9%, reflecting higher employment, increased capacity utilisation in mining and quarrying, and continuing strong recovery in tourism. Manufacturing also did well. Agriculture contracted however, reflecting the impact of drought on traditional export crops such as banana, coffee, and sugar.

In October international credit ratings agency Moody’s Investors Service upgraded Jamaica from B2 to B1, while revising the outlook to ‘Positive’ from ‘Stable’. Moody’s said the change reflected the country’s resilient response to external shocks such as the coronavirus (Covid-19) pandemic, and the government’s strong focus on fiscal control. It pointed out that Jamaica’s total public debt as a proportion of GDP which stood at 110% in 2020 is expected to end 2023 at a more manageable 78%, and to fall further in subsequent years.

Moody’s said it believes Jamaica is on a “sustained positive fiscal trajectory” as a result of reforms which have improved the effectiveness of fiscal, monetary, and economic policies. Under its existing agreement with the International Monetary Fund (IMF), Jamaica is committed to reducing its public debt-to-GDP ratio to 60% or less by 2027/28, to be achieved by maintaining an annual primary surplus of 7% of GDP.