Fitch Ratings has maintained Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a positive outlook.
The positive outlook comes as the island recorded two consecutive quarters of decline, due mainly to the passage of Hurricane Beryl.
“The positive outlook reflects Fitch's expectation of continued improvement in debt metrics and further strengthening of the policy framework over the next few years, including climate risk mitigants,” stated Fitch one of the top global rating agencies.
The affirmation reflects Jamaica's stronger governance, significant debt reduction progress, and “sound” fiscal framework.
Debt-to-GDP is projected to fall to 70.8 per cent in fiscal 2024/2025 from a high of 135.3 per cent in fiscal 2012/2013.
The ratings are however constrained by structural weaknesses, including low productivity and vulnerability to external shocks.
Fitch forecasts that Jamaica's primary surpluses will reduce general government debt to 66.3 per cent of GDP in fiscal year 2025/26, and further to 63.5 per cent in fiscal 2026/27, aiming to meet the government's debt target. Despite the economic downturn caused by Hurricane Beryl, Fitch expects an overall surplus of 0.3 per cent of GDP for the fiscal year ending March 2025.
Revenues are projected to grow by nine per cent year-over-year, driven by improvements in tax administration and labour market strength.
Jamaica's policy framework, built on the Bank of Jamaica's inflation-targeting monetary policy and fiscal policy anchored on debt reduction targets, remains stable. Inflation fell within the target range between, four to six per cent.
“Despite a GDP decline in the third quarter 2024 due to Hurricane Beryl, Fitch forecasts real growth to rebound to 2.5 per cent in 2025,” stated Fitch.
The current account moved to a surplus position in 2023, reaching 2.9 per cent of GDP, though it narrowed to 1.3 per cent of GDP in 2024.
Jamaica's external balance sheet improved, with net sovereign external debt projected to fall below 10per cent of GDP.
Also, Fitch lauded the banking sector as it remains well-capitalized, with non-performing loans at low levels.
