JA GOOD ECONOMIC NEWS: Moody's upgrades Jamaica's rating #MovingInTheRightDirection says Clarke

BY ALEXIS MONTEITH Observer writer Friday, December 13, 2019

Nigel Clarke, Jamaica's Finance Minister

Moody's Investors Service (Moody's), the internationally recognised bond credit rating arm of Moody's Corporation, has changed Jamaica's outlook from positive to stable while upgrading the long-term issuer and senior unsecured ratings of the Government of Jamaica from B3 to B2. The senior unsecured shelf rating was upgraded from (P)B3 to (P)B2.

Jamaica's Minister of Finance and the Public Service Nigel Clarke, on Wednesday posted the news on his social media with the comment, “Today Moody's upgraded Jamaica's credit rating to B2 from B3 on account of Jamaica's improved economic standing. This upgrade underscores the importance of GOJ's commitment to sustained economic reform. #MovingInTheRightDirection”

Moody's- Nigel Clarke

Moody's cited Jamaica's vigorous commitment to “fiscal consolidation and structural reforms” as well as the improvement of “debt structure limits risks associated with a high level of government debt” as the key factors pushing the upgrade.

Fiscal consolidation has brought about reduced imbalances in the economy while structural reforms such as inflation targeting, a free-floating exchange rate and increased foreign exchange reserves have made the country more resilient to economic shocks. Moody's also recognised the Government's “disaster risk financing strategy” as a mechanism to protect budget resources which would normally be called upon after a disaster.

Regarding the improvement of debt structure limits, Moody's elaborated that “the Jamaican Government has reduced gross borrowing requirements and lengthened the average maturity of its debt stock, while also reducing the cost of debt, resulting in an improving debt structure.” more