Rating agency Standard and Poor’s (S&P) today revised Jamaica’s economic outlook from stable to negative.
At the same time, the agency affirmed Jamaica’s B+ long term foreign and local currency sovereign credit ratings.
S&P says the revision in outlook reflects the impact of a presumed prolonged shock from the ongoing global coronavirus (COVID-19) health crisis on the Jamaican economy.
S&P estimates that the pandemic will negatively impact GDP and the external and fiscal accounts, due largely to significant declines in tourism and related activities and an overall reduction in foreign exchange earnings and tax revenues.
S&P projects that the economic contraction is likely to be more moderate than in many Caribbean sovereigns, due to the relatively higher level of diversification of the Jamaican economy.
It is the agency’s expectation that economic recovery will start to pick up in 2021 with full recovery by 2022-23, however, this will be dependent on the recovery of Jamaica’s close economic partners.
Finance Minister Dr Nigel Clarke reacted to the news.
“At this unprecedented time of the COVID-19 pandemic, it is significant that another international credit rating agency, S&P, has maintained Jamaica’s credit rating at B+ even as several other countries have had their ratings downgraded. The COVID-19 pandemic will certainly deliver a significant economic shock but Jamaica has options that many countries do not have. That is a good thing,” Clarke said in a statement.
He noted that the government has implemented a $10-billion spending stimulus package under a COVID-19 Allocation of Resources for Employees (CARE) Programme to cushion the shock of COVID-19 on lives and businesses.
The programme is a temporary cash transfer initiative aimed at reducing the economic impact of COVID-19 on small and micro businesses and individuals, particularly the most vulnerable.
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