The International Monetary Fund (IMF) Executive Board has concluded its 2025 Article IV consultation with Jamaica, as of June 12, 2025. The Board endorsed the staff appraisal without a meeting, and the Jamaican authorities have agreed to publish the Staff Report prepared for this consultation.
Over the past decade, Jamaica has made significant strides in reducing public debt, stabilizing inflation, and strengthening its external position. Despite setbacks from hurricane Beryl and tropical storm Raphael in FY2024/25, which affected agriculture and tourism, economic activity is expected to normalize. Unemployment rates reached an all-time low of 3.7% in January 2025, while inflation aligned with the Bank of Jamaica's target band of 4-6%. Strong tourism revenues and high remittances have kept the current account in surplus for two consecutive fiscal years.
Looking ahead, growth is projected to stabilize at its potential rate after recovery from recent disruptions. However, global financial conditions pose risks that require close monitoring. The Jamaican authorities are implementing prudent macroeconomic policies aimed at reducing public debt towards targets set by the Fiscal Responsibility Law. The Bank of Jamaica has maintained inflation around its target range through cautious monetary policy adjustments.
The IMF Executive Directors endorsed the staff’s appraisal: "Over more than a decade, Jamaica has been implementing sound macroeconomic policies supported by strong policy frameworks." They noted improvements in fiscal responsibility and resilience to climate change due to recently completed PLL/RSF arrangements.
The economy is rebounding this year with growth projected at potential rates. Risks include extreme weather events affecting tourism and agriculture, while upside risks involve faster recovery from weather events and favorable tourism trends.
Maintaining primary fiscal surpluses remains essential for reaching fiscal targets by FY2027/28. An operational medium-term debt anchor below 60% of GDP could help guide policies amid uncertainties.
Efforts continue to improve fiscal policy frameworks with operationalization of the IFC in January 2025 and completion of A-PEFA assessment recommendations. Tax reforms support revenue mobilization while wage bill reform enhances public pay transparency.
Monetary policy remains data-dependent amidst global uncertainties. The BOJ's inflation targeting regime supports stability alongside international reserves' positions. Future efforts aim to deepen FX markets and boost banking sector competition.
To address supply-side constraints like low productivity and structural impediments such as high crime rates or poor educational outcomes, ongoing reforms focus on product/labor markets and infrastructure development.
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