The Jamaica Economy is diverse. The country heavily relies on tourism which contributes largely to the country’s GDP, that is 60%. For decades, Jamaica has struggled with low growth, high public debt and many external shocks such as recessions weakened the economy. Jamaica was marked as one of the slowest growing developing countries in the world. In 2016, a radical shift has been observed. The country has recorded significant growth and improvement. Economist has predicted continued growth in 2017. In 2017, Jamaica is expected to grow at the 16th-fastest rate in the region among the 27 nations in LAC compared by the World Bank. Growth projections for Jamaica further increase to 2.3 percent in 2018 and 2.5 per cent in 2019. Jamaica is ranked as one of the most improved economies.
How fast is the economy growing?
According to the World Bank, the country’s credit rating has improved, and Jamaican bonds trade at a premium in international markets. Continued prudent macroeconomic policies and careful liability management reduced total government debt to 122 percent of GDP by the end of 2016. The World Bank estimated GDP growth by 1.7 percent during the calendar year 2016 and forecasts it to accelerate to around 2 percent in 2017, aided by the growth pick-up in the U.S., low oil prices, and reforms on the investment climate.
The International Monetary Fund (IMF) says that Jamaica’s economic growth is gradually recovering, and should reach 1.7 percent next year. In a press briefing at Jamaica House in Kingston, the IMF’s team said that growth in 2015/16 has been revised up to one percent, driven by agriculture and manufacturing.
“Growth is expected to reach 1.7 percent in FY 2016/17, as ongoing investments, including in tourism, crystallize and agriculture bolsters its strong recovery,” \, and we need more jobs in Jamaica to escalate the issue, IMF said.
The IMF also noted that inflation remains low, and gross international reserves continue to increase, reaching almost US$3 billion at the end of July. It pointed out, that unemployment remains high, at 13.7 percent, partly reflecting an expansion in the labor force.
Another observation made was the“Programme implementation under the EFF remains strong, all quantitative performance targets through end-June were met, with tax revenues exceeding expectations, and structural reforms are well in train,” the Fund said. It is argued that continued strong implementation of the government’s growth strategy is essential to support job creation and poverty alleviation.
“The Mission also underscores the importance of ongoing reforms in the public sector to achieve efficiency gains,” the release said.“The mission welcomes the authority’s recent proactive and successful liability management operation, which helped reduce refinancing risk in 2017 through 2019. In order to further minimize concentration and refinancing risks, it is necessary to develop a comprehensive strategy for liability management.
What has contributed to the prospective growth?
In summary, Jamaica economy is expected to improve a result of the continued Economic Reform Program, access to both domestic and international financial market. The credit rating has also improved and debt has also reduced.