Jamaica's External Position Remains Strong Amidst Global Uncertainty

  • Fitch Solutions forecasts that Jamaica's current account will remain in surplus in the near and medium term, albeit declining from 2.0% of GDP in 2025 to 1.1% in 2026. The surplus is expected to be supported primarily by a solid tourism sector outlook and stable remittance inflows.
  • While year-to-date stopover arrivals have fallen by 2.9%, Q2 2025 saw a modest rebound in total arrivals and Q3 2025 is showing continued strength. Furthermore, visitor spending rose 2.7% y-o-y in Q1 2025, lifting services exports by 2.2%. Meanwhile, remittances increased by 3.7% y-o-y from January to June 2025, which is expected to continue to expand broadly in line with US nominal GDP growth.
  • However, domestic demand strength will see Jamaica’s current account surplus narrow in the near and medium terms, underpinned by domestic macroeconomic indicators. Despite expected increases in bauxite/alumina production and favourable energy price moves, the merchandise trade deficit is expected to widen due to increased domestic demand for imports. Additionally, recovery and strength in Jamaica’s construction and mining sectors will push up capital goods imports in 2026. Finally, after years of successful fiscal consolidation, Jamaica’s government is expected to increase public investment and spending in the near and medium term, supporting domestic demand and narrowing the current account surplus further.
  • The country's external position poses limited risk to macroeconomic stability, demonstrated by a significant decline in overall external debt to 60.1% of GDP in Q1 2025 (from 64.9% a year prior) and a falling share of short-term debt. The Bank of Jamaica's foreign reserves are robust and growing, reaching US$6.2Bn in September 2025, which covers an estimated 7.4 months of imports, reflecting a stronger buffer relative to the 6-month buffer in the prior year
  • The net international investment position1 (NIIP) continues to improve, easing from a high of −155% of GDP in 2019 to −100.8% in 2025. Notably, foreign liabilities are shifting toward more stable direct investment, though downside risks remain from potential worsening global economic conditions, especially in the US – Jamaica’s key trading partner. These potential worsening conditions could result in lower-than-expected remittance flows and declining tourism receipts in Q4 2025 and 2026, thereby narrowing Jamaica’s current account surplus more substantially than expected.

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1The Net International Investment Position (NIIP) is a financial metric that represents the difference between a country's external financial assets and its external financial liabilities at a specific point in time.

(Source: Fitch Solution)