IMF Commends Jamaica’s Resilience and Reform Progress Amid Climate Shocks, Projects Growth Recovery in 2025

  • The Executive Board of the International Monetary Fund (IMF) noted that for more than a decade, Jamaica has been implementing sound macroeconomic policies supported by strong policy frameworks.
  • Its 2025 Article IV Consultation highlights Jamaica’s continued macroeconomic resilience despite recent climate-related shocks, such as Hurricanes Beryl and Raphael. The economy experienced a temporary slowdown in FY2024/25, particularly in agriculture and tourism, but is expected to rebound to its growth potential by FY2025/26.
  • Key indicators remain strong: unemployment reached a record low of 3.7%, inflation stayed within the central bank’s 4–6% target, public debt continued its downward trend, and external reserves were bolstered by consecutive current account surpluses.
  • The IMF highlighted that the government of Jamaica has advanced important reforms in fiscal transparency, public sector wage management, financial regulation, and institutional oversight, including the operationalisation of the Fiscal Commission.
  • The outlook suggests that, following the expected recovery in FY2025/26, Jamaica’s growth will return to its potential rate, with inflation stabilising within the Bank of Jamaica’s target range. However, downside risks remain elevated due to tightening global financial conditions, weaker growth in key tourism source markets, potential trade disruptions, and the ongoing threat of extreme weather events.
  • The IMF noted that Jamaican authorities are maintaining sound macroeconomic management underpinned by strong policy frameworks. A prudent fiscal stance is guiding public debt toward the target set in the Fiscal Responsibility Law (60% debt-to-GDP ratio by 2027/2028), while monetary policy has effectively anchored inflation near the midpoint of the target range, with inflation expectations trending toward the upper bound.
  • It further highlighted that the BOJ’s decision to lower policy rates in 2024 was appropriate, given the transitory nature of climate-related shocks and the anticipated return of inflation to target. Looking ahead, the current fiscal and monetary policy mix positions Jamaica well to manage external risks and sustain macroeconomic stability.

(Sources: IMF & NCBCM Research)