Jamaica’s Policy Reforms Bolster Stability, Growth Hinges on Productivity and Infrastructure Execution

• In its latest Country Risk Report, Fitch Solutions pointed out that Jamaica’s updated economic policy framework aims to foster a strong, inclusive environment by investing in education, implementing prudent economic policies, reducing crime, and promoting environmental sustainability and resilience.
• Fitch sees the potential for further improvement in Jamaica’s enabling environment over the near and medium term, driven by sustainable macroeconomic policy frameworks, microeconomic policy enhancements, and continued investment in security.
• In recent years, the government has made significant progress in improving macroeconomic policies and strengthening institutions, helping to reduce public debt, stabilise inflation and inflation expectations, and bolster Jamaica’s external position.
• These policies are expected to continue, supported by robust policy and institutional frameworks and a political consensus that prioritises continued fiscal and monetary stability and sustainability. Specifically, Fitch pointed to strengthened monetary and financial frameworks, through inflation targeting, de-dollarisation, and enhanced banking regulation, that are reinforcing long-term macroeconomic stability and should support investment and growth.
• However, while a high debt burden has historically been a major obstacle to growth in Jamaica, that debt reduction alone will be insufficient to accelerate growth. Low productivity, the high economic cost of crime, skills gaps, elevated energy costs, infrastructure weaknesses and exposure to global economic shocks and natural disasters will continue to weigh on growth and dynamism.
• To address these challenges, the Jamaican government has outlined an economic development strategy that seeks to leverage its improved macroeconomic stance to drive progress in other areas critical to long-term growth.
• Modern infrastructure development is at the heart of Jamaica’s 2025/2026 economic agenda. It focuses on transportation, water, healthcare, energy, broadband access, and special economic zones (SEZs). The government also aims to attract investment in oil and gas, diversify energy sources, and grow the global services sector through improvements in infrastructure, workforce skills, digital transformation, and regulatory reforms.
• However, despite Jamaica's stated goal of investing in infrastructure development, lingering budget execution issues may constrain the government's ability to fully implement its ambitious policy agenda.

(Sources: Fitch Solutions)