Tourism To Expand Jamaica’s Current Account Surplus

  • Jamaica’s current account surplus is set to amount to 1.7% of GDP in 2025, up from 1.2% of GDP in 2024, boosted by stronger tourism exports and lower oil import prices. This will be the country’s third consecutive annual current account surplus, sustaining a reversal that began in 2023.
  • Between 2003 and 2022, Jamaica only achieved one current account surplus, with an average annual deficit of 6.8% of GDP. Fitch expects surpluses to persist in the coming years, averaging 1.7% of GDP over 2025-2029.
  • The current account surplus narrowed from 2.9% of GDP in 2023 to an estimated 1.2% in 2024 due to a sharp decline in exports, partly resulting from disruption to tourism arrivals, re-exports and alumina shipments caused by Hurricane Beryl in Q3 2024. However, stronger exports in 2025 will reverse the narrowing of the current account surplus that occurred in 2024.
  • Goods exports are set to increase by 1.5%, boosted by stronger alumina shipments; however, lower oil prices will reduce oil export revenues in 2025, although the decline will be mitigated by increased export volume. Nonetheless, the goods trade balance will remain firmly in deficit as imports and exports rebound at similar speeds.
  • Stronger tourism exports will be the main driver of the expanding current account surplus. Services exports are expected to increase by 5.5% in 2025, accelerating from 1.5% growth in 2024. Tourist arrivals are set to increase by 4.1% to 2.9Mn, surpassing the pre-Covid-19 peak of 2.7Mn in 2019, while receipts will expand by 6.1%.
  • The United States (U.S.) will drive this increase, as the U.S. typically accounts for around half of all tourist inflows. The strength of the U.S. dollar and solid, albeit slightly slower, economic growth in the U.S. will encourage US citizens to travel abroad. Non-US tourist arrivals will also expand as the government’s tourism diversification strategy starts to bear fruit.
  • Remittances will also remain stable, contributing to a large secondary income surplus. Although a stronger increase in remittances will be prevented by slightly weaker economic growth in the US, remittances from the United Kingdom (UK) and Canada will increase as economic growth strengthens slightly in these economies.

(Source: Fitch Connect)