Moody’s Ratings has upgraded Jamaica’s long-term issuer and senior unsecured ratings to Ba3 from B1, while changing its outlook from positive to stable.

The upgrade reflects a decade of strengthened institutional and policy frameworks that have anchored fiscal discipline and enhanced monetary credibility. Jamaica has reduced government debt by nearly 40 percentage points of GDP since 2020, outperforming peers despite the temporary fiscal setback from Hurricane Melissa.

Moody’s expects Jamaica will maintain its commitment to sustained primary surpluses and keep debt on a downward path after a short-term increase related to disaster recovery spending. Recently, the Government of Jamaica secured approximately $6.7 billion in financial support from international institutions to address the hurricane’s impact.

The rating agency forecasts a real GDP contraction of nearly 2 per cent in 2025 and zero growth in 2026. Emergency and reconstruction spending will increase government expenditure by 5 percentage points of GDP above pre-storm forecasts. At the same time, Moody's projects to rise to 68 per cent in fiscal year 2025/26 before returning to 64 per cent by fiscal year 2028/29.

Jamaica’s disaster risk management toolkit, including catastrophe insurance, provides about $660 million in immediate liquidity, reducing the need for more expensive commercial borrowing.

The stable outlook balances Jamaica’s improved credit fundamentals against structural constraints and vulnerabilities. The country’s small economy, reliance on tourism, modest growth prospects, and high foreign-currency debt make it vulnerable to external and climate-related shocks.

In a related action, Moody’s also upgraded the backed senior unsecured debt rating of Air Jamaica Limited to Ba3 from B1, with a stable outlook.