JN Fund Managers’ Daily Market Update -January 30, 2020
Fitch Revise Jamaica’s Outlook from Stable to Positive
On January 29, 2020, Fitch Ratings Agency affirmed Jamaica’s Local-Term Currency Issuer Default Rating (IDR) at “B+” and revised the country’s outlook from stable to positive. According to Fitch, the change in Jamaica’s credit rating was due to the country’s strong performance of tax collection, the declining path of Debt to GDP; the decline in the in-terest rate burden, reduction in the unemployment rate, strong external liquidity and fiscal discipline. Fitch anticipates that Jamaica’s debt-to-GDP will fall to 92% at end-FY20 (April 2019 to March 2020) from 135% at end-FY12. The rating agency also anticipates that Jamaica’s economy may expand by around 1% in 2019 and 2020 before rising to 1.5% in 2021.
We believe that Fitch’s revised outlook signals greater confidence in Jamaica’s economy and is in line with our view that the country is on the right trajectory. While we acknowledge that certain downside risks, such as the impact of the coronavirus outbreak, may result in a negative shock to the local economy, we are of the view that Jamaica is now in a better position to withstand these shocks.