Jamaica is an upper middle income country with the largest population in the English speaking Caribbean. For decades, Jamaica has struggled with low growth, high public debt and many external shocks that further weakened the economy. Over the last 30 years, real per capita GDP increased at an average of just one percent per year, making Jamaica one of the slowest growing developing countries in the world. By 2012 Jamaica accumulated debt reaching 145 percent of GDP.
To stabilize the economy, reduce debt and unlock growth, the Government of Jamaica (GoJ) embarked on a comprehensive and ambitious program of reforms for which has garnered national and international support. As part of a comprehensive package, the World Bank and the Inter-American Development Bank (IDB) each agreed to provide US$510 million between the period April 2013 to March 2017, while the International Monetary Fund (IMF) committed a US$932 million funding program through its Extended Fund Facility covering the same four-year period. The World Bank has delivered the bulk of the program under the US$510m commitment. At the end of 2016, the IMF approved a three-year US$1.64 billion Stand By Agreement as a follow-up to the now concluded EFF. In addition, the International Finance Corporation (IFC) continues to support private sector development in Jamaica.
The reform program is beginning to bear fruit: Institutional reforms and measures to improve the investment climate have started to restore confidence in the Jamaican economy. . The country’s credit rating has improved, and Jamaican bonds trade at a premium in international markets. Continued prudent macroeconomic policies and careful liability management reduced total government debt to 122 percent of GDP by the end of 2016.
During the past three years economic growth rates have been steadily rising, although remaining lower than what is needed for eradicating poverty and boosting shared prosperity. The World Bank estimates GDP grew by 1.7 percent during the calendar year 2016 and forecasts it to accelerate to around 2 percent in 2017, aided by the growth pick-up in the U.S., low oil prices, and reforms on investment climate.
The country continues to be confronted by high levels of crime and violence and high unemployment that predominantly affect the youth. According to the Statistics Institute of Jamaica, unemployment rate is around 12.9 percent (October 2016), and considerably higher for the youth with 28.6 percent. The latest official estimates show that poverty headcount fell from 25 percent in 2013 to 20 percent in 2014
Last Updated: Apr 11, 2017