record in completing previous IMF programs”. Moody’s
Investors Service downgraded Jamaica’s government debt
rating to Caa3 from B3 in March on account of the NDX, the
country’s debt burden and poor outlook for growth.
approval. The authorities have committed to press ahead
with the next round of reforms, including the establishment
of a fiscal rule, and comprehensive tax reform. Risks to the
program remain high, including possible external shocks, a
delayed growth recovery, shortfalls in budget financing, and
policy slippage. Among the targets of the IMF agreement is
a growth rate of at least 2% by 2016-2017 and a debt to GDP
ratio of no more than 100% by 2015-2016.
On 24 September, 2013, Standard & Poor’s Ratings Services
raised its long-term foreign currency sovereign credit ratings
on Jamaica to B-from CCC+. The upgrade reflected recent
progress in stabilizing the economy, staunching the loss
of foreign-exchange reserves, and gaining access to new
external funding from official creditors with reference to
both the National Debt Exchange (NDX) and the new IMF
arrangement. Fitch Ratings upgraded Jamaica to ‘CCC’ from
‘RD’ (restricted default) in early March after it completed the
NDX. Fitch, while welcoming the IMF deal, has warned about
problems with implementation given the country’s “erratic
Provisional data indicates that Jamaica operated a fiscal deficit
of 4% in FY 2012/13, an improvement from the deficit of
6.4% in the year before. Encouragingly, Jamaica achieved a
primary surplus of 5.3% in FY 2012/13 up from a primary
surplus of 3.1% in FY 2011/12. This is in line with IMF
targets. A fiscal deficit of 0.5% is forecast for FY 2013/14 with
the primary surplus rising to 7.5%. As a percentage of GDP,
public debt is estimated at 134%. Debt servicing costs have
been reduced from 54% of Jamaica’s budget in FY 2012/13 to
43% in FY 2013/14 as a result of the NDX. It is expected that
Jamaica will adhere to its mandate to reduce its indebtedness
which is essential to maintaining a favorable trend in interest
rates, enabling the resumption of economic growth with job
creation and ensuring price stability.
Among the targets of the IMF agreement is a growth rate of at least
2% by 2016-2017 and a debt to GDP ratio of no more than 100% by
2015‑2016.
Figure 27
Jamaica Reserves & Import Cover
Outlook
25.00
2,000.00
20.00
1,500.00
15.00
1,000.00
10.00
5.00
0.00
0.00
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
500.00
International Reserves
Weeks
30.00
2,500.00
USD Millions
3,000.00
The Planning Institute of Jamaica (PIOJ) is forecasting
growth of 0.5% -1.5% in the third quarter of 2013 while growth
in FY 2013/14 is estimated by the IMF at 0.8%. These initial
signs of a recovery are likely to