'Good for business' - PSOJ hails Fitch’s affirmation of Jamaica’s credit rating

The Private Sector Organisation of Jamaica (PSOJ) has welcomed Fitch Ratings' affirmation of Jamaica’s credit rating at ‘BB-’ with a positive outlook, saying it reinforces the Government's "steadfast commitment to prudent fiscal and monetary policies".

On February 21, the global ratings agency affirmed Jamaica’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB-’ with a positive outlook. It upgraded Jamaica’s rating from ‘B’ to ‘BB-’ on March 5, 2024, citing improved fiscal discipline, a declining debt-to-GDP ratio, and the strength of key institutions.

The agency also noted that Jamaica's economy was affected by weather-related events last year, resulting in two quarters of decline.

"The affirmation of ‘BB-’ reinforces that Jamaica’s economic policies remain on the right track," said the PSOJ in a statement on Tuesday evening.

It also pointed to Jamaica's declining debt trajectory is projected to fall to 66.3% of GDP in fiscal 2025/26 from 70.8% this year, positioning closer to the medium-term target of 60% by fiscal 2027/28. It also said the Government's ability to generate primary surpluses, combined with effective tax administration and revenue growth, further supports economic resilience.

The PSOJ said it recognises "the importance of stable and predictable economic policies", especially with parliamentary elections due by September. "The broad consensus on Jamaica’s fiscal framework across political parties reduces uncertainty, fostering greater investor confidence and stability in financial markets," it said.

According to the business group, Fitch's latest decision is linked to four main things - the maintenance of large primary surpluses; commitment to an inflation-targeting monetary policy and fiscal discipline, strengthening of the country's external balance sheet and improved revenue generation.

The PSOJ said the development has direct and indirect implications for businesses. It noted that it can lead to lower borrowing costs; increase investor confidence, supports exchange rate and macroeconomic stability.

The group said Jamaica could further improve its credit rating by continuing to reduce its debt levels, implementing structural economic reforms, and enhancing crime reduction initiatives. Strengthening disaster preparedness and climate resilience measures were also identified as critical to mitigating economic risks.

While acknowledging the positive trajectory of Jamaica’s economy, the PSOJ noted ongoing challenges, including low productivity, bureaucratic inefficiencies, and vulnerability to climate-related disasters. It urged continued investment in human capital development, infrastructure, and security reforms to enhance long-term growth prospects.

On Monday, Finance Minister Fayval Williams said she was "pleased" with Fitch's update.

"Despite all the negative weather-related shocks to the economy, Fitch recognises that the government remains steadfast in its commitment to meet the 60% debt/GDP target which is the primary anchor for the fiscal policy being pursued by the Government. The rating and positive outlook affirmations are significant for Jamaica," she said in a statement issued by the ministry.

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