By Mariana Santibáñez
Jamaican debt: Breaking the cycle
Jamaica’s first quarter debt restructuring bought it some time. Whether it will be enough depends on the island’s success with a difficult economic turn-around
Times are tough for Jamaica. At nearly 150% of GDP, the Caribbean nation is struggling with one of the highest debt burdens in the world. Its economy barely grew last year, and has contracted in three of the last five.
Now, an IMF program aims to lower the country’s public debt to a more sustainable level, and bolster economic growth.
Since the deal was signed in May, authorities have pressed ahead with structural reforms, but concerns linger over how successful they will be, given the country’s past difficulties in turning the tide on the economy.
“They have shown they can run primary surpluses in short bursts, but they haven’t shown they can sustain them,” says Carl Ross, managing director of investments at Oppenheimer. “This time has to be different.”
Jamaica’s fiscal performance has been surprisingly strong — but the country must focus on reducing debt-to-GDP...
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