Moody’s Upgrades Jamaica’s Rating to B2; with a Stable outlook

• Moody's Investors Service on December 11, 2019, upgraded the Government of Jamaica's long-term issuer and senior unsecured ratings to B2 from B3. The outlook has been changed to stable from positive.
• The upgraded rating reflects Jamaica's strong commitment to fiscal consolidation and structural reforms that portend of continued decline in government debt and sustained improvements in economic resiliency. Additionally, its improving debt structure limits risks associated with high levels of government debt.
• The stable outlook reflects Moody's expectations that the improvements in Jamaica's credit profile, which have improved macroeconomic stability and put the debt on a downward trend, will be sustained. The stable outlook also reflects the structural credit constraints due to the country's small size, sizeable economic concentration in the tourism industry, low economic growth and vulnerability to external shock.
• The rating could be upgraded if it is concluded that the government is committed to institutional and economic reforms, combined with evidence of higher real GDP growth that will result in greater economic resiliency. Debt declines and increases in external buffers beyond current expectations would also be positive.
• A sharp reversal in the decline in government debt would weigh on Jamaica's credit profile, particularly as Jamaica's B2 rating incorporates a steady decline in the debt-to-GDP ratio as well as adverse exchange rate developments. An increase in external vulnerability, as reflected in a decline in the country's international reserve buffer would also be negative. Severe weather-related events that materially affect government finances threatening the sovereign's ability to service debt could also trigger a negative rating action.

(Source: Moody’s)