Jamaica's most pressing challenge is the country’s debt, which, has in turn severely hampered the country’s economic growth. The debt to GDP ratio, among the highest in the developing world, is gradually beginning to decline as a result of debt restructuring and fiscal contraction. It is estimated at about 140 percent at the end of the fiscal year, 2014/15 (March 2015).
The country is also still mitigating the medium-term effects of the global economic crisis, and protecting social gains while moving towards fiscal and debt sustainability.
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..
In May 2013 a four-year Extended Fund Facility (EFF) was approved with the International Monetary Fund (IMF) and yielded a total support package of US$932 million to facilitate the GoJ’s economic reform agenda to stabilize the economy, reduce debt and create the conditions for growth and resilience. In support to the IMF package, the World Bank Group and the Inter-American Development Bank (IDB) each allocated US$510 million to Jamaica for the
same period. In addition, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) will continue to support private sector development.
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 has also successfully completed six of 16 reviews of its IMF program.
The Jamaican Government is forecasting real gross domestic product (GDP) growth of 1.9 per cent for the fiscal year 2015/2016. Despite progress, the country is 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.
The unemployment rate in Jamaica is about 13.4% (end 2013/14), with youth unemployment more than twice the national rate. However, among Jamaica’s assets are its skilled labor force and strong social and governance indicators. To restore self-sustaining and job-creating growth, Jamaica will have to improve its international competitiveness and productivity, while also tackling urgent short-term economic and social needs.
Last Updated: Mar 30, 2015