Political Stability Expected In Jamaica Due To Crackdown On Crime, Easing Inflation

  • Fitch Solutions expects that falling inflation and unemployment will keep the threat of popular discontent low in the first half of 2023.
  • As estimated, headline inflation has started to come down in December to 9.3% y-o-y after the brief 10.3% uptick seen in November. It is expected that inflation will continue moderating through 2023, averaging 7.1 y-o-y, from 9.7% in 2022, supporting social stability.
  • Further, a recovering tourism industry will continue to support employment levels. It is anticipated that the labour market will remain tight through H1 2023 before moderating in the latter half of the year as the global slowdown takes hold and affects Jamaica’s key tourism markets like the US. The H223 increase in unemployment underpins the agency’s forecast of average unemployment of 6.5% in 2023, modestly up from an average of 6.2% in 2022.
  • Fitch has kept its Short-Term Political Risk Index (STPRI) at 72.7 out of 100, as inflation has already started coming down, supporting social stability. The ‘policy continuity’ component remains the highest at 85.0 as the JPL holds a majority in the Jamaican Parliament there are few threats to the government's policy agenda before the next general election, which is not required until 2025.
  • Furthermore, although there was an uptick in violent crime and the number of murders in 2022, the government’s clampdown on violent crime has driven a decline in murders in January 2023. It is anticipated that the government will continue to take steps to combat crime in the months ahead, supporting the security/external threats component, which remains at 70.0.

(Source: Fitch Solutions)