Fitch Ratings Agency, has affirmed Jamaica’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with the outlook remaining stable.
The Stable Outlook is supported by the expectation that the public debt level will return to a firm downward path post-pandemic, which is underpinned by political consensus to maintain a high primary surplus, the resilience of external finances, and stronger economic policy institutions.
The general government deficit is projected at 4.3% of GDP in fiscal 2020-2021 (ending March 31) from a surplus of 0.9% a year ago. Expenditure growth is projected at only 3.8% (compared to an average of 7.8% between fiscal 2017-2018 and fiscal 2019-2020). Revenues declined by a projected 12.3%. Debt-to-GDP is projected to reach 110.9% by end-March 2021 from 94.8% a year before, largely reflecting exchange rate depreciation and GDP contraction (61% of total government debt is in foreign currency).
Fitch expects that the economy will grow by 4.5% in 2021, with risks to the downside stemming from uncertainty around the vaccine roll out and a possible third wave of the virus. Fitch expects that growth will accelerate in 2022 to 5.2%. (FITCH)
Extract from CARICOM BUSINESS Newsletter Vol 4 No 11
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