S&P Global Ratings on Sept. 27 upgraded Jamaica's long-term foreign and local currency sovereign credit ratings to B+ from B, reflecting the country's improving external liquidity.
In the rating agency's view, a more robust overall external position and compliance with the government's fiscal targets provide greater cushion for the country against external shocks.
A reduction in debt along with growth in international reserves has helped to strengthen Jamaica's external position, while continuity in fiscal consolidation policies has anchored policy-making stability and predictability, S&P Global Ratings said. Jamaica also stands to benefit from enhanced monetary flexibility with reforms in the role of the central bank, it added.
However, Jamaica's debt and interest burdens remain high, which limits fiscal flexibility and constrains its ratings. Economic growth also remains sluggish due to structural issues. "Nevertheless, the government's commitment to fiscal prudence fosters macroeconomic stability — including low inflation — and supports the country's creditworthiness," the rating agency said.
Aside from the upgrade, S&P Global Ratings affirmed Jamaica's B short-term foreign and local currency sovereign credit ratings. It also raised the country's transfer and convertibility assessment to BB- from B+.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
