Jamaica’s Long-Term Credit Rating Reaches Best Level Since 1999

On 13 September 2023, Jamaica’s credit rating was upgraded in the Global Ratings of Standard and Poor (S&P), which gave the country a BB- rating, the best Jamaica has received since the agency started rating its sovereign debt in 1999. The improved rating reflected S&P’s expectation that the government of Jamaica will remain committed to implementing prudent fiscal policies and reducing its debt. It is also expected that supportive economic policies, including a flexible exchange rate and an effective monetary policy, will continue to be pursued by the government. Credit ratings are typically used by investors to measure the creditworthiness of a potential investment and have an enormous effect on a nation’s borrowing costs.

Benefit to Jamaica

Jamaica’s Minister of Finance and the Public Service, Dr. Nigel Clarke, called the upgrade “historic and noted it was “wonderful news” for the country. He said that with the upgraded credit rating, Jamaica will be able to obtain better terms on financing. This translates to substantial savings over the long term, which then allows for higher spending on matters such as education, security, health, and infrastructure. The improved rating also means that potential investors will view the country as an attractive option. Clarke added that the new rating represents a win for the government’s focus on economic policy, particularly in regard to the devastating impact of COVID-19 on the nation’s economy.

Reflections on Past Ratings

Clarke went on to emphasize that he considers the ratings upgrade a national achievement that needs protection. He described Jamaica as coming up from a “junk” credit rating (CCC), which meant the cost of financing things that affected the entire island population in a negative way, and made improvements to obtain ratings in the single B range over the past decade. The last four years have seen Jamaica with a B+ rating, and now it has improved even further to the historic B-.

S&P’s Expectations

While S&P noted that the Jamaican government’s interest burden remained high, the agency’s expectations for the future are that the burden will drop to 17.5 percent of government revenues within the coming fiscal year and fall even further to under 15 percent by 2026. S&P also predicts a continuation of growth for Jamaica.

Photo – Dr. Nigel Clarke’s Facebook Page