Moody’s upgrades Jamaica’s rating to B2; with a stable outlook
Moody’s Ratings Agency on Wednesday upgraded the Government of Jamaica’s (GOJ’s) long-term issuer and senior unsecured ratings to B2 from B3 with an outlook of stable.
Moody’s stated that the rating upgrade reflected the GOJ’s steady “track record of improved fiscal policy management” achieved through its resolute commitment to fiscal consolidation which helped in sustaining continued improvements in the country’s economic resilience and debt ratios.
With respect to Jamaica’s debt dynamics, reduced gross borrowing requirements, lengthened average maturity of the debt stock and reducing cost of debt were viewed as strong drivers for the upgrade.
Key structural reforms to strengthen Jamaica’s macroeconomic framework, particularly, the move to inflation targeting that enabled the Bank of Jamaica to ease monetary policy, stimulating demand for credit and supporting a pickup in credit growth, also contributed to the upgrade.
Moody’s also recognised the steps taken by the GOJ to strengthen its fiscal resilience against natural disasters by developing a disaster risk financing policy with strategies to cover immediate financing needs arising from weather-related events.
The change in outlook from positive to stable was based on expectations that these macro-economic and debt dynamics improvements will be sustained.
The Minister of Finance and the Public Service, Dr Nigel Clarke said “We are pleased with the upgrade of Jamaica’s credit rating by Moody’s. Today Jamaica enjoys hard-earned macro-economic stability which previously eluded us for over three decades. We must protect this with everything we have. Today’s upgrade underscores the importance of GOJ’s commitment to sustained economic reform.”