Jamaican Government to Narrow Its Fiscal Deficit and Prioritise Debt Repayment In 2022

• Fitch Solutions forecast that Jamaica’s government will reduce its fiscal deficit to 0.1% of GDP in FY2022/23 (April 1 – March 31), from an estimated 0.3% in FY2021/22, as revenue growth outpaces spending. 
• The government ran budget surpluses from FY2017/18 to FY2019/20 to comply with consecutive IMF programmes from 2013 to 2019. However, the impact of the pandemic caused economic activity and government revenues to contract in FY2020/21, flipping the balance into deficit. 
• With the effects of the pandemic subsiding, it is expected that the government will return to a path of consolidation in the coming years as it winds down social spending initiatives enacted during the pandemic. In the short-to-medium term, it is forecasted that the government will likely increase debt repayments and contain current expenditures, resulting in a budget surplus in FY2023/24.

(Source: Fitch Solutions)