IMF trims Jamaica’s 2027 outlook

The International Monetary Fund (IMF) has lowered its forecast for Jamaica’s economic growth in 2027, signalling a slower rebound than it expected six months ago, even as it upgraded its outlook for 2026.

In its October World Economic Outlook (WEO) released this week, the IMF cut its 2027 forecast for Jamaica to 2.4 per cent from the 3.1 per cent forecast in April. At the same time, it raised its projection for 2026 to zero growth from a previously forecast 1.2 per cent contraction.

Jamaica’s projected 2.4 per cent growth rate for 2027 is slightly below the 2.5 per cent forecast for Latin America and the Caribbean. However, the country is still expected to outperform several regional peers, including The Bahamas at 1.9 per cent, Belize at 2.0 per cent, and Barbados and Trinidad and Tobago at 2.2 per cent.

The IMF nudged its global growth forecast for 2027 up to 3.4 per cent while holding its 2026 projection at 3.1 per cent, even as it cut Jamaica’s outlook for 2027.

“Prolonged uncertainty could eventually weigh more heavily on confidence”, the Fund said. The report warned that geopolitical conflicts, trade-policy shifts and other global shocks continue to cloud the outlook for growth and inflation.

The report also noted that small island developing states are expected to record slower growth because of higher energy costs, as well as weaker tourism and remittance flows. It did not provide an explanation for Jamaica’s revised forecast.

The Bank of Jamaica (BOJ) has also pointed to global uncertainty in its recent rate decisions. Last month, it increased its policy interest rate by 50 basis points to 6.0 per cent. Announcing the decision on September 29, Governor Dr Brian Langrin said: “Continuing to look through these shocks could allow temporary pressures to become entrenched.”

Langrin noted that inflation was 7.9 per cent in August, above the BOJ’s four to six per cent target range, and said global factors and weather conditions could keep price pressures elevated until mid-2027.

The Bank of Jamaica’s Monetary Policy Committee is scheduled to announce its next interest-rate decision on November 18.

carolyn.guniss@rjrgleaner.com