Fitch Revises Jamaica’s Economic Outlook Following Q1 2025 Expansion

  • Given the growth of Jamaica’s productive industries in the first quarter of 2025 (Q1 2025), Fitch Solutions has revised its 2025 growth forecast from 1.0% to 1.5%. However, while Jamaica’s economic expansion in Q1 exceeded Fitch’s subdued expectations, the agency continues to anticipate lacklustre growth for Jamaica in 2025. Ongoing trade tensions, sluggish tourism activity, and dampened external demand will continue to weigh on the Jamaican economy through year-end.
  • With little to suggest that trade tensions will fully abate in the coming months, expectations are for growth in Jamaica to remain modest. However, risks to the outlook are tilted to the upside, with several domestic macro indicators giving reason for optimism.
  • Jamaica continues to enjoy low unemployment (3.7% in Q1 2025) and stable inflation, which underpins the view that the Bank of Jamaica will cut its policy rate by 75bps through year-end, stimulating domestic consumption and investment.
  • Additionally, remittance flows have remained resilient in 2025, supporting domestic consumption despite a downbeat United States (U.S.) growth outlook and onerous U.S. immigration policies. However, the One Big Beautiful Bill Act (OBBBA), approved by the U.S. Senate, introduces a 1% tax on international money transfers sent from the U.S. to recipients abroad. For Jamaica, the U.S. is the largest source market for remittances, accounting for around 70% of all remittances. As such, any slowdown in remittance transfers brought on by the new taxes could threaten Fitch’s growth outlook.
  • Furthermore, while total bauxite production contracted slightly in April and May, total production rose 2.7% year-over-year (y-o-y) from January-May 2025 compared to the same period in 2024. Finally, Jamaica’s growth figures will see positive base effects in Q3 and Q4 as Jamaica continues to recover from Hurricane Beryl, which made landfall on July 3, 2024.
  • That being said, weak external demand and a sluggish tourism outlook will continue to act as headwinds for Jamaica’s economy through the end of 2025. While total tourist arrivals increased by 4.1% y-o-y in April 2025, stopover arrivals (excluding cruise passengers) declined by 3.3% from January–April 2025 compared to the same period in 2024, with total arrivals down 7.9%, negatively impacting tourism-linked industries and Jamaica’s overall economic outlook.

(Source: BMI, a Fitch Solutions Company)