Jamaica Wins Second Credit Upgrade in a Week as Debt Load FallsEzra Fieser
Jamaica’s credit rating was raised for the second time in a week as Standard & Poor’s said the Caribbean island is making progress in lowering debt levels that remain among the world’s highest.
S&P lifted Jamaica to B from B-, taking it to five steps below investment grade and placing the $14.4 billion economy in the same category as Ethiopia and Albania. Moody’s Investors Service raised its rating by one level on May 28, saying the government’s commitment to fiscal reform should help accelerate economic growth in the next two to three years.
“Jamaica’s growing track record in meeting its fiscal targets also ensures continued inflows of official and other funding, strengthening the country’s external outlook,” Julia L. Smith, an S&P analyst, wrote in a note announcing the upgrade. The rating company also changed Jamaica’s outlook to stable from positive.
The upgrades come two years after the country of 2.8 million people restructured about $9 billion in local bonds and agreed to a four-year International Monetary Fund package that calls on the government to cut spending and lower its debt burden.
Government debt will fall to less than 120 percent of gross domestic product by 2018 from an estimated 128 percent this year, S&P said. The company forecast the economy will grow 2 percent this year, compared with 0.4 percent last year.
“This is tangible evidence of the progress that the government has made in managing the economy,” Finance Minister Peter Phillips said in an e-mailed statement.