S&P Revises Jamaica’s Outlook to Stable from Positive

Following damage assessments and the incorporation of Hurricane Melissa’s impact, S&P Global Ratings (S&P) believes that the likelihood of an upgrade for Jamaica over the next 12 months has become more remote. Hurricane Melissa made landfall in Jamaica on October 28, and evaluating its effects has taken time, the agency noted. These impacts were reflected in the government’s December budget update, particularly in the revised economic and fiscal outlook.
Consequently, on December 18, 2025, S&P revised its outlook on Jamaica to stable from positive and affirmed its 'BB' long-term and 'B' short-term local and foreign currency sovereign credit ratings.
The stable outlook balances the expectation that the government will prudently manage recovery and rebuilding efforts, guided by a stable institutional foundation, with Jamaica’s inherent vulnerabilities to external shocks. While the economy is expected to recover as Jamaica rebuilds, this will take time, and expectations are that the government’s fiscal position will temporarily weaken as its spending needs increase. The debt burden is expected to rise before continuing its long-term trajectory of decline.
Net general government debt is expected to increase to 55% of GDP by next year, from 49% last year. S&P believes net government debt will continue to fall, reaching 50% of GDP by 2028. At the same time, the agency expects government interest to revenues will be higher than previously anticipated, given higher borrowing and debt, averaging about 17% of revenues from 2025-2028. Furthermore, primary fiscal surpluses are expected to remain below Jamaica’s average of the past decade in 2025 and 2026, close to 3% of GDP, on average, from 2025-2028.
With solid growth in the tourism industry and throughout the economy estimated in the first three quarters of 2025, prior to the hurricane, S&P expects the overall GDP contraction in 2025 to be less severe than it otherwise would have been. The agency expects a contraction of 2% for the full-year 2025. In 2026, the contraction at the beginning of the year will be somewhat offset by growth in the fourth quarter. Expectations are for a contraction of 1.8% in 2026, and thereafter growth averaging 3% in 2027 and 2028 as the economy rebounds.
Overall, despite a significant hit to growth in the near term and a need to fund rebuilding, Jamaica’s solid institutions and preparedness for external shocks, in addition to an expected economic rebound, support its current BB ratings.
Fiscal policy and economic recovery are the main factors that could lead to a downgrade or upgrade of Jamaica’s credit rating by S&P. S&P could downgrade Jamaica within the next year if it sees weaker fiscal discipline leading to larger, persistent deficits and rising debt, or if the economy does not recover as expected, which would hurt the country’s external position.
On the flip side, S&P could raise Jamaica’s ratings over the same period if the country’s debt burden improves through a sustained drop in the interest-to-revenues ratio and a faster recovery in fiscal performance, and if economic growth is materially stronger and quicker than expected, bringing long-term growth in line with peers at a similar level of development.

(Source: S&P Global Ratings)