Debt, fiscal adjustment, and economic growth in Jamaica
Peer Reviewed
Date issued
January 2016
Subject
Economic Development;
Fiscal Rule;
Macroeconomy;
Public Debt;
Fiscal Management
JEL code
E62 - Fiscal Policy;
H62 - Deficit • Surplus;
H63 - Debt • Debt Management • Sovereign Debt;
H68 - Forecasts of Budgets, Deficits, and Debt;
O49 - Economic Growth and Aggregate Productivity: Other
Country
Jamaica
Category
Policy Briefs
The buildup of debt in Jamaica has been concurrent with the country's sloweconomic growth, and the issues are intertwined. High debt slows economic
growth, and slow economic growth makes the process of reducing the debt
burden more difficult. Jamaica committed itself to a strict fiscal consolidation
program to reduce its debt burden. The fiscal consolidation will be long,
spanning more than half a generation, until reaching the debt-to-GDP target of
60 percent by 2026. Besides adhering to the fiscal targets, success will depend
on the country's ability to break away from a history of low economic growth.
growth, and slow economic growth makes the process of reducing the debt
burden more difficult. Jamaica committed itself to a strict fiscal consolidation
program to reduce its debt burden. The fiscal consolidation will be long,
spanning more than half a generation, until reaching the debt-to-GDP target of
60 percent by 2026. Besides adhering to the fiscal targets, success will depend
on the country's ability to break away from a history of low economic growth.
