Moody's upgraded Jamaica's long-term issuer and senior unsecured ratings to B2 from B3, saying the country's fiscal consolidation efforts support the continued improvement in debt metrics and economic resiliency.

The rating agency said Jamaica is expected to post large primary surpluses and keep a downward trend in the debt-to-GDP ratio. After peaking at 135% of GDP in fiscal year 2010/2011, government debt is projected to drop to 94% of GDP at the end of fiscal year 2019/2020, and to 84% of GDP at the end of fiscal year 2021/2022.

In upgrading the ratings, Moody's also said that structural reforms, such as the central bank's adoption of an inflation-targeting scheme and a floating exchange rate, have strengthened the country's macroeconomic framework, making it more able to absorb shocks. In addition, the government has designed a disaster risk financing strategy to boost the country's resilience to weather and environmental risks.

Jamaica's improving debt structure also triggered the ratings upgrade, Moody's added. The country has lowered its public borrowing requirements and cost of debt, while extending the average maturity of its debt stock.

However, the country's debt structure remains vulnerable to foreign-exchange fluctuations, Moody's warned, as foreign-currency denominated debt accounts for 62% of total government debt as of fiscal year 2018/19.

As part of the ratings action, Moody's revised Jamaica's outlook to stable from positive, saying the country is expected to sustain improvements in its credit profile, amid a continued exposure to shocks due to low economic growth and other structural constraints.