Jamaica 

Jamaica country policy

Policy established 26 May 2009

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Country class: 6

Jamaica country facts

Atradius DSB Economic Research
Country Report last updated :  9 June 2009
Country :  JAMAICA 

Political Situation
Fairly Stable

Head of state
QEII, represented by governor-general Kenneth Hall.

Form of government
Government of the Jamaica Labour Party (JLP) headed by prime minister Bruce Golding.

Internal Economic Situation
Very Poor Performance

General situation
After years of a structurally low GDP-growth, Jamaica has entered a recession (-4%) as exports and tourism are hit by the global (esp. US) recession and domestic demand curbed by fallen workers’ remittances and very strict monetary policy (high key interest rate). Mining companies have cut back production of alumina/bauxite. Since the Aug 2008-peak (26%), inflation has levelled off to a still high 12.5% in March 2009. The financial sector is considered to be vulnerable to setbacks in consumer credits, loans to tourism firms and public sector finance (26% of total bank assets). Jamaica is ranked 96th out of 180 on the TI-corruption index.
 
External Economic Situation: Worrying

Main sources of foreign exchange
Tourism, bauxite/alumina, sugar, workers’ remittances.

Main foreign markets
EU (40%), USA (17%), Canada (15%), Latin America (7%).

Main expenses of foreign exchange
Machinery/transports (26%), fuels (15%).

 
Balance of payments  
The high oil price had a fatal impact on the trade account in 2008. With income from transfers and tourism stagnating, the current account showed a record 21% GDP-shortfall. These deficits and high debt service are constantly nerving foreign investors, making the Jam$ vulnerable to capital flight. Between Sept 2008 and Febr 2009 the currency has depreciated by 22%; since then more stable exchange rate.