IMF says Jamaica’s priority now is to advance reconstruction while preserving macro-economic stability and deepening reforms

November 11, 2026

The International Monetary Fund (IMF), says Jamaica’s priority now is to advance reconstruction while preserving macroeconomic stability and deepening reforms, considering the more challenging external environment.

This was outlined in the preliminary finding by IMF Deputy Division Chief W. Raphael Lam, who led a team to Jamaica from October 27 to November 4.

The team was in the island to conduct the 2026 article four consultation.

It said Jamaica’s strong policy frameworks and sustained reforms have underpinned its resilience in the aftermath of Hurricane Melissa, the strongest in Jamaica’s recorded history.

The statement notes that the authorities’ effective disaster risk financing framework, together with the strength of its fiscal, monetary and financial sector frameworks, have supported an appropriate policy response to cushion the severe impact while preserving market access on favorable terms.

It said the priority now is to advance reconstruction while preserving macroeconomic stability and deepening reforms, considering the more challenging external environment.

Mr. Lam said economic activity is recovering gradually. Following a contraction of 1.2 percent in FY2025/26, growth is projected to recover moderately to 1.3 per cent in FY2026/27, with output returning to its pre-hurricane level by mid-2027, supported by reconstruction efforts and a recovery in tourism.

According to the statement, risks to the growth outlook are tilted to the downside, while inflation risks remain on the upside.

It added that higher energy and food prices from prolonged conflict in the Middle East and drought conditions from El Niño, and a further tightening in global financial conditions, could weigh on growth and intensify inflationary pressures.

On the domestic front, delays in both reconstruction and restoration of tourism capacity would also weaken the recovery.

The statement said the government appropriately activated the fiscal rule’s escape clause to support vulnerable households and hurricane-related reconstruction efforts.

Revenue mobilization efforts to broaden the tax base and strengthen administration are welcome.

However, it adds that efforts are needed to accelerate reconstruction and build-back better by closing long-standing infrastructure gaps and strengthening resilience to future natural disasters.

The IMF staff said the establishment of a new National Reconstruction and Resilience Authority (NARRA) provides an opportunity to do so, although work should continue in enhancing procurement, contract management, public investment management, and interagency coordination to address implementation bottlenecks.

Meanwhile, containing non-priority recurrent spending remains essential, including by ensuring that the current fuel price smoothing mechanism continues to operate symmetrically to ensure cost recovery over time.

The IMF statement issued today said preserving debt sustainability remains a priority.

It said as reconstruction advances and the output gap closes, fiscal efforts need to shift toward rebuilding buffers. Revenue mobilization and restraint in current spending growth are critical to preserve fiscal space for priority investment and return public debt to a sustained downward path.