Jamaica 'B/B' Ratings Affirmed; Outlook Revised To Positive From Stable On Improved External Position

• On Sept. 25, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P Global Ratings affirmed its 'B' long- and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. 

• The positive outlook reflects the at least one-in-three likelihood of an upgrade if, in the next 12 months, Jamaica further strengthens its external liquidity position while maintaining tight fiscal policy and high primary surpluses. The combination of modest GDP growth and better external liquidity, as reflected in improvement in gross external financing needs to less than 100% of current account receipts (CAR) plus usable reserves could boost the sovereign's credit rating. [S&P] expect that the government will continue to meet strict fiscal targets, and maintain its commitment to a gradual reduction in its debt and interest burdens. [S&P] also expect that the government will continue advancing toward a more effective monetary policy framework for the central bank, including a more flexible exchange rate. 

• [S&P] could raise the ratings in the next year if Jamaica continues improving its external liquidity such that the economy becomes more resilient to potential external shocks, including possibly higher oil prices. In addition, over a longer period, sustained economic growth at higher levels would strengthen Jamaica's economic profile, potentially resulting in a higher rating.[S&P] could revise the outlook to stable during the same period if the recently improving trajectory of Jamaica's external position reverses and begins to weaken, or the government misses fiscal targets, leading to an increase in debt and interest burdens.

 Source: S&P