CariCRIS has assigned an investment-grade credit ratings to the Government of Jamaica, with a stable outlook, citing the country’s fiscal commitments, debt-reduction strategy and continued financial sector stability despite the economic impact of Hurricane Melissa.
The Caribbean Information and Credit Rating Services Limited (CariCRIS) assigned Jamaica a CariA rating for foreign currency obligations and CariA+ for local currency obligations on its regional rating scale. On the Jamaica national scale, the Government received a jmAAA rating.
The stable outlook reflects expectations that Jamaica’s economy will recover over the next two years following the impact of Hurricane Melissa, while its debt-to-GDP ratio is projected to resume a downward trajectory towards the Government’s target of below 60 per cent by financial year 2029/30.
CariCRIS identified the Government’s fiscal commitments and implementation of measures to restore the primary surpluses needed to reduce public debt as important factors supporting the ratings.
The agency also pointed to Jamaica’s comfortable import cover and the continued stability of its financial sector.
It expects economic growth to remain consistent, although low, over the medium term. Inflation is also projected to moderate within the Bank of Jamaica’s target range, although risks remain elevated because of geopolitical developments and volatile weather patterns.
Despite an expected temporary increase in the debt-to-GDP ratio following Hurricane Melissa, CariCRIS projects that the ratio will consistently decline over the medium term.
CariCRIS said the ratings could improve if Jamaica records real GDP growth between one and two percentage points above the agency’s baseline. projections for at least two consecutive years.
Other factors that could support an upgrade include interest cover exceeding seven times and import cover remaining above seven months for at least 12 months, supported by stronger current account performance or increased foreign direct investment.
However, CariCRIS warned that a sustained deterioration in economic performance could place downward pressure on the ratings.
A downgrade could be triggered if real GDP growth averages below zero over the next 24 to 36 months, or if the country’s debt-to-GDP ratio rises above 80 per cent within the next 12 to 24 months.
Jamaica, the third-largest island in the Caribbean, has an estimated population of 2.8 million and an economy driven by tourism, wholesale and retail trade, construction, agriculture, mining and manufacturing.
It noted that tourism remains a major source of foreign exchange earnings and employment, while bauxite and alumina production continue to contribute to merchandise exports. Remittances also provide significant support to household consumption and foreign exchange availability.
CariCRIS acknowledged that sustained fiscal consolidation and improvements in public debt management have strengthened Jamaica’s economic resilience.
However, the country remains exposed to external shocks, including fluctuations in international commodity and energy prices, downturns in major tourism markets and disruptions to global trade.
Its vulnerability to hurricanes, flooding and droughts also presents significant economic risks, with natural disasters capable of damaging infrastructure, agricultural production and tourism facilities while placing additional pressure on public finances.
