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.
We project growth in emerging market and developing economies have now bottomed out and will rise modestly from 3.9% in 2022 to 4.0% in 2023 and 4.2% in 2024. More in the #WEO update: https://t.co/DeypiSrmWf pic.twitter.com/zq5P7sWKeb
— IMF (@IMFNews) February 15, 2023
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.
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.