Pandemic, Rising Crime Unlikely to Limit Policymaking by Ruling Party

• Fitch Solutions believes the surge in COVID-19 cases in Q1 2021, and the resulting lockdowns, will weaken Jamaica’s economic recovery and undermine support for the ruling Jamaica Labour Party government.
• The length of the lockdown is expected to pare back some of the gains made in the Jamaican labour market during the second half of 2020. The country’s unemployment rate fell to 8.9% in Q4 2020 from 12.6% in Q2 2020, but will likely return to double digits amid the months-long lockdown.
• The country’s slow vaccination programme will likely extend the economic impact of the pandemic, as only 4.5% of Jamaica’s population had received at least one dose of the COVID-19 vaccine, and the government’s supply agreements would vaccinate only 16.0% of the population. As a result, Fitch Solutions believes Jamaica will fail to reach herd immunity until 2022.
• It also believes that an increase in violent crime, on top of Jamaica’s regional leading homicide rate, will also weigh on public approval for the JLP. The country’s homicide rate was 3.5% higher year-over-year (YoY), despite the restrictions on mobility seen in Q1 2021. In response to the uptick in violence, the Private Sector Organization of Jamaica (PIOJ) publicly called for the government to pass additional security legislation. This pressure could push the government to increase spending on policing, potentially limiting its ability to maintain higher social spending in the quarters ahead.
• Despite a potential decline in public support, the agency believes the JLP government will be able to pursue significant fiscal consolidation in the medium term due to its large parliamentary majority.

(Source: Fitch Solutions)