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The Minister of Finance & the Public Service

The Hon. Nigel Clarke, DPhil., MP, is Jamaica's Minister of Finance and the Public Service and is Member of Parliament for St Andrew Northwestern. ...

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Miss Darlene Morrison...

S&P Affirms Jamaica at ‘B+’, Outlook Unchanged

December 8, 2020
 
Standard and Poor’s Global Ratings, today, December 8, 2020, affirmed the Government of Jamaica’s
Long-Term Foreign and Local Currency Issuer Default Rating (IDR) at ‘B+’ with the outlook 
remaining negative.
 
The S&P ratings outcome accounted for the economic and financial realities faced by the country,
arising from the COVID-19 pandemic and the actions undertaken by the Government of Jamaica
(GOJ) to minimize the effects. The onset of the pandemic caused a disruption in some productive
sectors, particularly Tourism which was a contributory factor to the contraction in the country’s GDP.
It also disrupted the trend of fiscal surpluses realized over the past three years, with Jamaica
programmed to post a fiscal deficit this year.
However, despite the adverse outcomes, S&P in their analysis expects the country to return to fiscal
surpluses in the short-term due to the GOJ’s demonstrated commitment to prudent fiscal policy
management. Surpluses over the previous years supported the build-up of fiscal buffers which aided
the funding of the Government’s COVID-19 economic and social response through the Covid-19
Allocation of Resources for Employees (CARE) programme to persons and businesses affected by the
pandemic as well as financing the health response.
 
S&P views the Jamaican economy as relatively well diversified and expects a strong rebound in
growth in 2021, driven largely by the re-opening of the Tourism sector. The pace, however, will
depend on the “timing of the outbreak peak in Jamaica and key visitors’ countries”. S&P anticipates
the rebound will commence in 2021 but expects full recovery in FY2022/2023.
The ratings release also highlighted the majority mandate given in the recently held general election.
This in their view will continue to support the accomplishment of macroeconomic stability through
continued commitment to fiscal responsibility and consolidation.
 
Dr. the Honourable Nigel Clarke, Minister of Finance and the Public Service, in commenting on the
rating action said, “The affirmation of Jamaica’s credit rating at B+ is a sign of confidence in
Jamaica’s future. We entered the pandemic with significant fiscal buffers, which provided us with the
flexibility to absorb and respond to the crisis without affecting medium term economic prospects. As
such, as S&P forecasts, Jamaica is poised to return to economic growth in fiscal year 2021/22 although
achieving pre-COVID levels of economic output will occur in the medium term.”
 
The Minister went on to state “the fact that we are continuing to strengthen, build and entrench
economic institutions in the middle of the pandemic, through modernising our central bank and making
it independent, launching a public investment map and tabling the Bill to establish a Independent
Fiscal Commission is real show of strength. These institutions will enhance transparency and
accountability in the implementation of fiscal and monetary policy. These are important to enhance
policy credibility long into the future.”
 
S&P Global Ratings stressed that if there are prolonged deficits at current high levels, or weaker
external accounts due to economic recovery being weaker than expected then there is a possibility for
lowered ratings. However, consideration to revising the outlook to stable will be given if “risks of a
more severe or prolonged outbreak were to subside and the country’s public finances begin returning
to previous levels.”
 
For further information contact:
Debt Management Branch
Ministry of Finance and the Public Service
30 National Heroes Circle
Kingston 4
Tel: (876) 932-5419
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Contact: Cheryl Smith
 

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