Global credit ratings agency, Fitch has affirmed the Government’s Long-Term Foreign-Currency Issuer and Local Currency Issuer Default Rating at ‘B+’ and revised the outlook from stable to positive.
According to Fitch, the revised outlook reflects the country’s efforts in maintaining the debt-to-GDP on a downward trajectory and large primary surpluses.
In explaining the affirmation of the “B+” ratings, Fitch pointed out that the high debt-to-GDP and low growth levels were constraining factors.
However, it says prospects for growth have improved and it is expected to move steadily to 1.5 per cent by 2021.
Fitch also said the country has a favourable business climate according to the World Bank Doing Business Survey, moderate inflation, low volatility and moderate dependence on commodities.
Additionally, Fitch is citing strong tax collections, which they project will be nearly 5 per cent higher than last year, even though the government implemented billions of dollars in tax cuts last year.
Fitch says the strong tax collection shows that economic growth is being driven by consumption, or higher spending by the public, as well as a robust labour market.
Meanwhile, the agency is also looking at Jamaica’s new flexible exchange rate, which it says should allow the country to absorb shocks.