Jamaica: Economic Outline
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Jamaica is an upper-middle-income economy that is nevertheless struggling due to low growth, high public debt and exposure to external shocks. The country’s economy was severely affected by the combined effects of the COVID-19 global crisis and the flooding caused by tropical storms, with GDP contracting an unprecedented 10% in 2020 before rebounding by 4.6% the following year. Preliminary figures from the IMF show that the Jamaica’s growth rate stood at around 4% in 2022, fuelled by the recovery of the tourism sector (35% of GDP, with the largest market consisting of U.S. stopover visitors) and mining exports (10% of world bauxite production). The outlook points to a continued recovery in activity in 2023 (3%) and 2024 (2.3%), but global risks remain high.
After peaking at 108.1% in 2020, the country’s debt-to-GDP ratio went down to 86.2% in 2022 and is expected to follow a downward trend over the forecast period (79.7% and 76.8% in 2023 and 2024, respectively - IMF) as sizeable primary budget surpluses should be the key driver of the debt decline. Nevertheless, meeting the government's 60% debt target by 2028 looks unlikely. Overall, Jamaica has no need to issue external debt on the global financial markets given its prudent fiscal stance and low external maturities. Since 2020, the budget balance has seen a significant improvement after pandemic support measures resulted in the first budget deficit since 2012. The central government's 12-month rolling balance in December 2022 was JMD 42 billion (equivalent to 1.8% of GDP). The 2023-2024 budget draft targets a primary surplus of more than 5% of GDP. The government aims to exercise strict control over spending and enhance tax collection through digitalization to increase revenues. Although the public sector salary reform will contribute to expenditure pressures for the next three years, its cost is expected to be limited; hence Fitch forecasts a primary surplus of 4% of GDP from 2023 onwards. The global rise in energy and commodity prices drove inflation to a peak of 11.8% in April 2022, declining to 8.1% by January 2023. The tightening of financial conditions by the Bank of Jamaica is expected to contribute to a reduction in inflation this year (7%) and the next (5%, within the BoJ's 4%-6% CPI target). Over the last 30 years, real GDP per capita has increased at an average of just 1% per year, making Jamaica one of the slowest-growing developing countries in the world. The economy is diverse, but industries lack investment and modernization. The country continues to derive most of its foreign exchange from tourism, remittances and bauxite/alumina. The USA is the country's main trading partner, biggest lender and main source of remittances from the diaspora.
Data from the Statistical Institute of Jamaica (STATIN) shows that as of July 2022, the unemployment rate stood at 6.6%, down by 0.5% from October 2021. In recent years, living conditions have improved in terms of access to basic services, education and health care. Jamaica has been classified as an upper-middle-income country by the World Bank, with a GDP per capita (PPP) estimated at USD 11,962 in 2022 (IMF). According to the latest edition of the Jamaica Survey of Living Conditions, 11% of the population lives below the poverty line, the lowest rate in 10 years.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 13.89 | 14.67 | 16.04 | 17.25 | 18.11 |
| GDP (Constant Prices, Annual % Change) | -9.9 | 4.6 | 4.0 | 2.2 | 2.0 |
| GDP per Capita (USD) | 5,073 | 5,355 | 5,846 | 6,282 | 6,585 |
| General Government Gross Debt (in % of GDP) | 109.7 | 94.2 | 84.1 | 77.9 | 74.0 |
| Inflation Rate (%) | 5.2 | 5.9 | 9.5 | 7.0 | 5.0 |
| Current Account (billions USD) | -0.06 | 0.11 | -0.51 | -0.51 | -0.48 |
| Current Account (in % of GDP) | -0.4 | 0.7 | -3.2 | -2.9 | -2.7 |
Source: IMF – World Economic Outlook Database - October 2021.
Note: (e) Estimated Data
| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Jamaican Dollar (JMD) - Average Annual Exchange Rate For 1 MUR | 3.52 | 3.71 | 3.80 | 3.75 | 3.62 |
Source: World Bank - Latest available data.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 15.2 | 16.2 | 68.6 |
| Value Added (in % of GDP) | 8.3 | 20.9 | 58.2 |
| Value Added (Annual % Change) | 8.3 | 2.4 | 4.8 |
Source: World Bank - Latest available data.
| Socio-Demographic Indicators | 2022 | 2023 (e) | 2024 (e) |
|---|---|---|---|
| Unemployment Rate (%) | 0.0 | 0.0 | 0.0 |
Source: IMF – World Economic Outlook Database - Latest available data
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Labour Force | 1,473,383 | 1,502,858 | 1,457,011 |
Source: International Labour Organization, ILOSTAT database
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Total activity rate | 71.15% | 70.44% | 71.38% |
| Men activity rate | 76.49% | 76.02% | 77.10% |
| Women activity rate | 65.94% | 65.01% | 65.82% |
Source: International Labour Organization, ILOSTAT database
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
See the country risk analysis provided by Coface.
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
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Latest Update: September 2023
