The International Monetary Fund (IMF) has downgraded its growth outlook for Jamaica.

In its latest economic outlook released yesterday, the IMF predicted that the local economy would register economic growth of 4.3 per cent this year, down from the projected growth of 4.7 per cent last year. The IMF also projected slower growth for 2024 at 1.8 per cent, a 0.2 per cent downward revision.

The forecast for 2028 remains at 1.6 per cent. The IMF’s forecast comes days after the World Bank upgraded its outlook for Jamaica with expected growth for this year at 2.3 per cent. The Washington-based financial institution said that while the Jamaican economy was rebounding, risks remained significant with the coronavirus (COVID-19) pandemic being the main one.

It said: “Renewed COVID-19 waves in Jamaica or abroad could lead to a more prolonged disruption of tourism, trade, and capital flows. Another risk is posed by the uncertain duration of global inflationary pressures, which have boosted inflation to well above the central bank’s target range of 4 – 6 per cent. Natural disasters continue to be an ever-present risk.”

The IMF reported that in the decade preceding the pandemic, Jamaica made good progress to restore macroeconomic and financial stability. Aided by the IMF’s financial support, Jamaica’s fiscal deficit was brought down from 11 per cent of gross domestic product (GDP) in 2009 to a surplus while the public debt fell from 142 per cent of GDP to 94 per cent in 2019.

Outlook for LAC

Inflation and the current account deficit have declined. Meanwhile, the economic outlook for the Latin America and Caribbean (LAC) region has been upgraded to GDP growth of 2.3 per cent. In April, the projection for this year was 1.6 per cent.

The IMF says the region’s GDP will also grow by 2.3 per cent next year, reflecting a 0.1 per cent improvement in the outlook. For 2028, growth is forecast at 2.5 per cent, up from the 2.3 per cent programmed in April this year.

The World Bank also upgraded the region’s GDP outlook in its forecast last week.