June 25, 2025
On June 12, 2025, the Executive Board of the International Monetary Fund (IMF) concluded its Article IV consultation with Jamaica. The Board endorsed the staff appraisal without convening a formal meeting, and the Jamaican authorities have agreed to publish the accompanying Staff Report.
Jamaica has made notable progress over the past decade in strengthening its macroeconomic foundations. The country has significantly reduced public debt, anchored inflation and expectations, and improved its external position. These achievements reflect a strong commitment to institutional reform and sound economic management. Despite the economic contraction in FY2024/25 caused by Hurricane Beryl and Tropical Storm Raphael, which disrupted agriculture, infrastructure, and tourism, the economy is expected to recover as these temporary effects fade.
Unemployment has reached a historic low of 3.7 percent as of January 2025, and inflation has stabilized within the Bank of Jamaica’s (BOJ) target range of 4 to 6 percent. The current account has remained in surplus for two consecutive fiscal years, supported by strong tourism performance and high remittance inflows. International reserves have also continued to strengthen.
The medium-term outlook is positive. Growth is projected to return to its potential rate once the recovery is complete, and inflation is expected to remain within the BOJ’s target range. However, global risks remain elevated. These include tighter financial conditions, slower growth in key tourism markets, trade disruptions, and the ongoing threat of extreme weather events. The authorities are maintaining a prudent fiscal stance and a cautious, data-driven monetary policy to help mitigate these risks.
The IMF Directors commended Jamaica’s continued progress in fiscal management, including reforms to public sector compensation, tax and customs administration, and debt management. They also welcomed the operationalization of the Independent Fiscal Commission and the completion of the A-PEFA assessment, which offers guidance for improving public financial management.
The Directors supported the BOJ’s inflation-targeting framework and encouraged further development of foreign exchange and capital markets. Jamaica’s exit from the FATF grey list in 2024 was recognized as a major achievement, and ongoing efforts to strengthen anti-money laundering and counter-terrorism financing frameworks were encouraged.
To sustain long-term growth, the IMF emphasized the importance of addressing structural challenges such as low productivity, crime, infrastructure gaps, and barriers to competition. The government’s ongoing reforms in education, labor markets, and climate resilience are seen as essential to unlocking private investment and enhancing economic potential.
Source: (International Monetary Fund)
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