Jamaica’s debt to fall faster than projected, says Fitch

Fitch Ratings expects Jamaica’s debt-to-GDP ratio to decline faster than official forecasts, a new report released this month shows.

The rating agency also made note of the country’s successful general election held on September 3 in a separate but related update.

“Fitch Ratings forecasts Jamaica’s economy to expand by 2.1 per cent in 2025 after a contraction in 2024. We expect the debt/GDP ratio to reach 58 per cent in FY26, below the government’s target of 60 per cent,” the report stated.

Comparatively, Jamaica’s debt-to-GDP ratio now stands at 62.4 per cent, down from 67.3 per cent, following an update to the country’s international statistical methodology that nudged up the nominal value of GDP, according to a notice on the Ministry of Finance Debt Management Unit’s website.

The total stock of public debt was $2.19 trillion as at August 2025.

Before adopting the new methodology, the Jamaican government had projected that the debt-to-GDP ratio would ease to 63.7 per cent by the end of the current fiscal year, March 2026, and further to 61 per cent in 2027, as outlined in the Medium-Term Debt Management Strategy published in February.

Jamaica is aiming for a debt ratio of 58.8 per cent by fiscal year 2027-28.

Fitch Ratings, which maintains dual headquarters in the United Kingdom and the United States, is one of the top three major global credit rating agencies, the others being Moody’s and Standard & Poor’s, both headquartered in the United States.

The forecast by Fitch signals confidence in Jamaica’s fiscal trajectory despite recent economic headwinds. The agency cited sustained primary surpluses and adherence to medium-term fiscal rules as evidence of the country’s strong commitment to fiscal discipline.

Growth is expected to be driven by tourism recovery, remittances, and public investment.

The update follows Fitch’s assessment of Jamaica’s general election held on September 3, noting that the results “signal continuity in key economic policies”.

The Jamaica Labour Party, led by Prime Minister Dr Andrew Holness, won a third consecutive term, though its parliamentary majority was reduced by 15 seats.

“Policy continuity supports macroeconomic stability and reinforces Jamaica’s credit profile,” Fitch wrote in its September bulletin, reaffirming the country’s ‘BB-’ rating with a Positive Outlook.

While praising Jamaica’s fiscal management, Fitch also highlighted persistent structural challenges, including low productivity, high crime rates, and demographic pressures. External vulnerabilities —such as climate exposure and dependence on tourism — remain key risks.

The agency noted that Jamaica may face growing pressure to increase spending in areas previously deprioritised during its decade-long debt reduction effort, including infrastructure and personal income tax relief — both emphasised in recent pledges by the JLP and the People’s National Party, led by Opposition Leader Mark Golding, albeit in different ways.

These pressures are expected to contribute to a modest decline in primary surpluses in 2025 and 2026, though surpluses are projected to remain above 3.0 per cent of GDP.

“Pressures may rise to increase spending in areas deprioritised to deliver large debt reduction over the last decade. For example, the PNP’s election manifesto prioritised infrastructure investment. Both parties also pledged to reduce the personal income tax burden to ease cost-of-living pressures,” the report on the election stated.

Nonetheless, Jamaica’s “strong track record of adherence to fiscal rules” and its demonstrated willingness to consolidate underpin Fitch’s view that it will maintain fiscal discipline.

steven.jackson@gleanerjm.com