Jamaica’s economy is showing signs of stability in 2025, supported by record-low unemployment, manageable inflation, and a decade-long effort to reduce public debt. However, the island remains vulnerable to global uncertainty and climate-related shocks, leaving growth prospects modest.
Growth outlook
The World Bank forecasts GDP growth of around 1.7% in 2025, while the IMF projects 2.1%. Sectors such as agriculture, construction, and mining are expected to underpin expansion, with tourism continuing to play a central role. The Bank of Jamaica estimates medium-term growth between 1% and 3%, though performance will depend on external demand and weather conditions.
Inflation and employment
Inflation has returned to within the central bank’s 4–6% target range, averaging around 5% this year. Price stability has allowed policymakers to ease pandemic-era restrictions and maintain steady interest rates. Unemployment has fallen to an historic low of about 3.7%, reflecting sustained activity in services and construction.
Public finances
Jamaica has achieved a significant fiscal turnaround, cutting its debt-to-GDP ratio from around 144% in 2012 to just over 70% in 2025. The government has kept its commitment to avoid new taxes for a tenth consecutive year, reinforcing confidence in policy continuity. Ratings agencies such as Fitch have maintained Jamaica’s sovereign outlook at BB−, citing fiscal discipline and structural reforms.
Risks and vulnerabilities
Despite these achievements, challenges remain. Jamaica’s small, open economy is highly exposed to global trade shifts and fluctuations in US demand, which could affect exports and remittances. Extreme weather events, particularly hurricanes, continue to pose a major risk to agriculture, infrastructure, and the vital tourism industry. These factors could weigh on the country’s ability to sustain growth momentum.
Outlook
Jamaica’s financial position today is markedly stronger than a decade ago, reflecting strict fiscal discipline and reform. While growth is modest, the combination of stable inflation, low unemployment, and reduced debt gives the economy a firmer foundation. The key test ahead will be managing external shocks while keeping reforms on track.
REFH – Newshub, 1 September 2025
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