Like its neighbors across the Caribbean, Jamaica is vulnerable to natural disasters including hurricanes, flooding and the effects of climate change. It is an upper middle income country but struggles with low growth, high public debt and many external shocks which weaken its 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 had accumulated debt equal to 145 percent of GDP.
To stabilize the economy, reduce debt and fuel growth, the Government is implementing an ambitious reform program which has garnered national and international support. As part of a comprehensive package, the World Bank and the Inter-American Development Bank each agreed to provide US$510 million between April 2013 and March 2017, while the International Monetary Fund (IMF) committed a US$932 million funding program through its Extended Fund Facility (EFF) covering the same four-year period. At the end of 2016, the IMF approved a three-year US$1.64 billion program under the Stand-By Arrangement 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 institutional reforms and efforts to improve the investment climate starting to bear fruit. The country’s credit rating has improved and Jamaican bonds trade at a premium in international markets. Total government debt fell to 121 percent of GDP by the end of 2016.
Jamaica’s GDP rose by 1.4 percent in 2016 and similar growth is expected in 2017. That follows three years of steady growth. According to the Statistical Institute of Jamaica (STATIN), poverty fell to 20 percent in 2014 from 25 percent in 2013, but it still remains higher than pre-2009 levels.
Despite the progress, faster economic growth is needed to eliminate poverty and boost shared prosperity. Crime and violence levels remain high. Youth unemployment is a persistent problem. Unemployment in April 2017 was about 12.2 percent, while 26.2 percent of those between 20 and 24 years of age were unemployed, according to STATIN.
Last Updated: Sep 29, 2017