Nearshore Americas

IMF Applauds Jamaica, Projecting Nearly 4% GDP Growth

The International Monetary Fund (IMF) stated that the Jamaican economy is rebounding faster than expected, adding that GDP growth could be close to 4% in the current fiscal year.

Revenues from the tourism industry are increasing with each passing day. As a result, the foreign exchange reserves are bulging as well.

Citing a gradual improvement in the macroeconomic situation, the bank also praised the Jamaican government for its economic policies.

However, as the United States continues to raise interest rates amid soaring inflation, foreign investment in Jamaica’s capital markets is plummeting.

The ongoing war in Ukraine and the possibility of a recession in the United States could make the situation even worse, the international lender warned.

“With COVID-19 easing and flight arrivals returning to pre-crisis levels, real GDP growth is projected to be around 4% in 2022,” the IMF said.

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With oil prices likely to fall further in the months ahead, the IMF expects Jamaica’s inflation rate to decline. Today, however, “inflation is above the central bank’s target range,” meaning that Jamaica could see an increase in interest rates in the near future.

“Commodity prices have led to a widening of the current account deficit. But international reserves remain healthy. The financial system is well capitalized and liquid”, added the bank.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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