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Financial News

Jan 2016 Financial News

Rating agency expects continuation of economic reforms under JLP

Jan 25, 2016

New York, USA — International rating agency Standard and Poor’s says it does not expect “any significant shift in Jamaica’s current economic programme, even if the pending elections results in a change of government”.

“There might be some policy changes, but the Jamaica Labour Party (JLP) is on record of supporting the programme,” Julia Smith, an analyst with the agency said in an interview with the Jamaica Observer.

She noted that the current administration had been successful in undertaking the programme, under an agreement with the International Monetary Fund (IMF).

Jamaica has passed 10 consecutive tests under a four-year Extended Fund Facility agreement with the Washington-based institution, but continues to record anaemic growth and high unemployment.

Asked what needs to be done for Jamaica to achieve significant growth, Smith argued that both the IMF and the Jamaican Government recognised that “a shift towards a sustainable growth strategy is needed, especially given the success of the macroeconomic reform”.

She said that both sides were moving in that direction, as she pointed to a strategic investment policy being pursued by the Government that was producing the global logistics hub initiative, agro parks, energy diversification and encouraging growth in business process outsourcing (BPO).

Smith said the Government now had some capital spending space with the recent easing of some restrictions and the PetroCaribe debt buy-back.

Meanwhile, the latest report on Jamaica’s credit worthiness by Standard and Poor’s places the island at B Stable/Outlook.

The report said that the stable outlook “balances Jamaica’s growing fiscal stability, stabilised debt trajectory and strengthened external liquidity against its public sector reform difficulties and weak growth.

Standard and Poor’s said it might raise the ratings “if Jamaica is able to gradually reduce government’s debt burden and achieve sustainable improvements in external liquidity”.


By Harold G Bailey
Jamaica Observer

Monday January 25, 2016