Jamaica’s Credit Rating Moves Up As Election Nears

Jamaica’s first female prime minister and the leader of the left-leaning People’s National Party (PNP) Portia Simpson Miller. AFP PHOTO Ratiba HAMZAOUI (Photo credit should read Ratiba HAMZAOUI/AFP/Getty Images)

By NAN Business Editor

News Americas, NEW YORK, NY, Fri. Feb. 12, 2016: As Jamaicans gear up to go to the polls to elect a new government in 13 days, February 25th, the country’s credit rating under the leadership current Prime Minister Portia Simpson Miller of the Peoples National Party, (PNP), has been given a boost.

Fitch Ratings on Thursday revised Jamaica’s credit rating to ‘B’ from ‘B.’ The country ceiling has been affirmed at ‘B’ and the short-term foreign-currency IDR affirmed at ‘B’.

The upgrade of Jamaica’s IDRs, according to Fitch, is due to the government’s continued adherence to the fiscal primary surplus targets agreed with the IMF; the passing of the 10th review of the program in December and the decline in public debt.

A buyback of Petrocaribe debt in July 2015 owed to Venezuelan national oil company PDVSA, for half of its face value, reduced debt by 10pp of GDP and alleviates the external debt repayment burden. Jamaica funded the buyback by issuing USD2 billion in Eurobonds in July 2015.

The bond issue also prefunded the repayment of JMD45 billion of a JMD60.9bn billion (3.6 percent of GDP) domestic debt maturity in February.

External finances, according to Fitch, also continues to improve, helped by lowered oil prices on the global market as well as good performance of tourism and remittances.

However, the country’s rating outlook moved down a notch – from positive to stable. Fitch urged higher economic growth and improved fiscal performance leading to faster debt reduction in order to ensure a return to a positive economic outlook.

Jamaica’s election on February 25th will be observed by the Organization of American states. Violence between gangs at an opposition Jamaica Labor Party (JLP) rally Sunday and again on Nomination Day, Feb. 8th, has marred an otherwise peaceful lead up to the elections that will see the PNP seeking another term while the JLP seeks a return to office.