Moody's improves Jamaica's credit rating, Shaw welcomes adjustment
Moody's Investors Service today upgraded Jamaica’s sovereign senior unsecured rating and provisional shelf ratings from Caa2 to B3 and revised the outlook from positive to stable.
Moody's says its decision to upgrade Jamaica's ratings was driven by the significant and sustained fiscal consolidation and the government's strong commitment to continued reforms to reduce its high debt burden.
It says the significant improvement in the current account balance and in reserve levels was also a factor, noting that it has reduced external vulnerability.
Moody’s says the stable outlook assigned to the B3 rating balances its expectation that the debt burden will come down materially over the next 2 to 3 years against Jamaica's high susceptibility to external shocks, particularly natural disasters.
The ratings agency says at B3, Jamaica's rating reflects its low economic growth, very high debt burden and very high interest payments.
It further states that Jamaica has relatively strong institutions compared to similarly rated peers but its recent track record of debt restructuring constrains its assessment of institutional strength to ‘low'.
Meanwhile, Jamaica’s finance minister, Audley Shaw, has welcomed the rating adjustment.
He says it represents an endorsement of the continued progress made by Jamaica in sound economic management and reduction of its public debt.
Shaw says the Government is resolute in its thrust to address the risks identified by Moody’s while seeking to improve the overall economic fundamentals of Jamaica.
He says the adjustments to be made under the new three-Year Standby Arrangement with the International Monetary Fund (IMF) will further strengthen Jamaica’s credit rating.