IMF Concluding Statement After Jamaica Visit

• The staff of the International Monetary Fund (IMF) have commended Jamaica following their official visit to the island from April 30 to May 7, during which they conducted the 2025 Article IV consultation.

• Over the last decade, Jamaica has successfully reduced its public debt, firmly anchored inflation and inflation expectations, and strengthened its external position. The country has built an enviable track record of investing in institutions and prioritising macroeconomic stability. Jamaica has also navigated recent global shocks and natural disasters in a manner that is agile, prudent, and supportive of growth, according to the concluding statement.
• Although GDP declined in FY2024/25 due to hurricane Beryl and tropical storm Raphael, which damaged agriculture and infrastructure and undermined tourism, economic activity is projected to normalise as these effects wane.

• Unemployment has fallen to all-time low levels (3.7% in January 2025); however, low productivity has been worsened by structural issues, including high crime, barriers to competition, poor educational outcomes, inadequate infrastructure, and trade barriers.

• Further, while inflation has converged to the Bank of Jamaica’s (BOJ’s) target band of 4-6%, the Fund noted that implementing reforms to enhance the foreign exchange market and allow greater exchange rate flexibility would strengthen the transmission mechanism of monetary policy.

• Nonetheless, the current account has shown a modest surplus for the last two fiscal years, supported by robust tourism revenues and high remittances. Consequently, the international reserves’ position has continued to improve.

• The IMF also acknowledged that the Government of Jamaica (GOJ) continues to implement sound macroeconomic policies, supported by effective fiscal policy frameworks. As a result, a primary surplus is expected for FY2025/26, leading public debt to fall towards 65% of GDP by the end of the fiscal year, the lowest level in 25 years and well below pre-pandemic levels. 

• Looking ahead, the outlook points to growth settling at its potential rate once the FY2025/26 recovery is complete and with inflation stabilising at the BOJ’s target range. Nevertheless, global developments require continued close monitoring. Global downside risks from tighter financial conditions, slower growth in key tourist markets, and trade policy disruptions remain significant. Additionally, extreme weather events such as floods, hurricanes, or earthquakes could negatively affect economic activity.

(Source: IMF)