Jamaica is an upper middle income country with the largest population in 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. The country accumulated public debt stood around 140% of GDP.
To reverse this trajectory, the Government of Jamaica embarked on a comprehensive and ambitious program of reforms for which it has garnered national and international support: a four-year Extended Fund Facility (EFF) by the International Monetary Fund (IMF) providing a support package of US$ 932 million; World Bank Group and the Inter-American Development Bank (IDB) programs providing US$ 510 million each to facilitate the GoJ’s economic reform agenda to stabilize the economy, reduce debt and create the conditions for growth and resilience. In addition, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) will continue to support private sector development.
The reform program is beginning to bear fruit: Institutional reforms and measures to improve the environment for the private sector have started to restore confidence in the Jamaican economy. Jamaica jumped 27 places to 58 among 189 economies worldwide in the 2015 Doing Business ranking. The country’s credit rating has improved and the Government has raised US$2 billion in the international capital market in 2015 at a time when investors were moving out of emerging market debt. Debt has also gone down from to 126% of GDP.
Economic growth rates have been low during the past three years but are steadily rising, and the World Bank forecasts GDP growth accelerating to 1.7 percent in 2016 and to over 2 percent in 2017, aided by improving growth in the U.S., low oil prices, and reforms of investment climate regulations. The country continues to be confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment. Jamaica, which had seen its poverty rate drop almost 20 percent over two decades, saw it increase by eight percent in a few years after the onset of the global economic crisis.
The unemployment rate in Jamaica is estimated at 13.5 percent (October 2015, Statistical Institute of Jamaica). The unemployment rate for youth is considerably higher at 30.3 percent, and the average unemployment rate for women is double that for men: 18.5 versus 9.3 percent. However, Jamaica’s skilled labor force and strong social and governance indicators remain its key assets.
Last Updated: Mar 30, 2016