The Independent Fiscal Commission (IFC) has found Jamaica’s macroeconomic environment remained broadly stable in FY 2024/25, with relatively low inflation, a stable foreign exchange market, and a strong labour market.

In its assessment of the Government of Jamaica’s achievement of the budget and fiscal targets as at end-June 2025, the IFC noted that hydrological (weather-related) shocks constrained real economic activity and limited revenue growth.

Despite these challenges, stability persisted into the first quarter of FY 2025/26. Inflation stood at 3.8 per cent in June 2025, below the Bank of Jamaica’s target range, while unemployment fell to a record low of 3.3 per cent in April 2025. Real gross domestic product (GDP) was estimated to have grown by 1.4 per cent, though geopolitical headwinds threaten to slow recovery.

A key development was the Statistical Institute of Jamaica’s (STATIN) adoption of the 2008 System of National Accounts (SNA), which increased Jamaica’s nominal GDP by approximately eight per cent on average. This revision lowered the debt-to-GDP ratio to 62.4 per cent at March 2025, positioning Jamaica to achieve its legislated debt target of 60 per cent two years ahead of schedule.

The central government primary surplus exceeded targets for FY 2024/25 and the April–June 2025 period, while the overall fiscal deficit of J$12.6 billion for the specified public sector was significantly below projection. However, revenue challenges remain: a J$14.2 billion tax shortfall at the end of FY 2024/25 overstated the base for FY 2025/26, implying that additional revenue efforts might be required to meet the budgeted amount.

The IFC also flagged under execution in capital spending across the specified public sector, with only J$20.1 billion spent in the first quarter of FY 2025/26 compared with a budgeted amount of J$40.5 billion. This underspending, particularly on infrastructure projects, poses risks to much-needed economic growth.

The commission acknowledged progress in areas such as updating the SNA, reducing informality through digitalisation of services and improving the Public Investment Management System (PIMS). However, gaps remain, particularly in relation to public sector compensation negotiations and comprehensive reporting on the specified public sector, as required by law.

Since the preparation of the SFP, there have been noteworthy improvements in macro-fiscal outcomes. Specifically, the economy expanded by 1.6 per cent during the June 2025 quarter, inflation fell to 1.2 per cent at August 2025 (the lowest point-to-point inflation in nearly 60 years), and unemployment held steady at 3.3 per cent in July. Additionally, there was an uptick in tax revenue for the fiscal year to August. 

The IFC says it will undertake a deeper assessment of macro-fiscal performance for the first half of the fiscal year, as well as the outlook for the remainder of FY 2025/26 and the medium-term, following the Government’s tabling of the interim fiscal policy paper, expected in October.