Standard and Poor (S&P) Global Rating, recently upgraded the government of Jamaica’s Long-Term Foreign and Local Currency Issuer Default Rating (IDR) from B+ to BB-, with a ‘Stable’ outlook. This announcement was made by the Minister of Finance and Public Service, Dr. Nigel Clarke. The Minister made this announcement during the opening ceremony of the Jamaica Institute of Engineers marking the observance of Engineers’ Week, at the summit in New Kingston on Monday, Sept. 18, 2023.
Dr. Clarke said that the upgrading of Jamaica’s rating by Standard and Poor will facilitate access to financing on better terms. “So, if you pay less for money that you need to finance yourself, it means more becomes available for other expenditure, such as health, security, and infrastructure. So, creditworthiness is linked to fiscal space,” Clarke noted.
According to Minister Clarke, it is the best global grading Jamaica has received from S&P since the entity started rating the country’s sovereign debt in 1999. “Jamaica has the opportunity to access financing at costs lower than we have before, on relative basis,” Clarke explained.
In continuing to highlight the importance of the upgrading to the country’s need, Clarke pointed out that there was a direct linkage between credit rating and the country’s ability to finance needs. He noted also that the higher the credit rating, the more favorable the investment climate is deemed to be. “It means that investments are less risky. Our credit rating is linked to the riskiness of the perceived riskiness of an economy. The higher the credit rating is the more open the economy will be to foreign investment… So, a higher credit rating provides an environment that supports the creation of more jobs for the Jamaican people,” the minister added.
Clarke started also that a higher credit rating affects the terms of trade that Jamaica has with the rest of the world. He further commented on the local businesses in Jamaica that have to post bonds overseas in order to import items, also pointing out that Jamaica’s imports are US$6 Billion worth of items. “For all these imports, the businesses have to get credits and some of them they have to post credit insurance, they have to put bonds up. All of those become more affordable, the higher the credit rating of the country is. So, it is wonderful news for Jamacia.” Clarke said.
Dr. Clarke further noted that “the kind of flows that will come to our shores represents the kind of investments that we have never imagined possible before. That is why it must be a national effort to, not only maintain the credit rating that we have earned as a country but to improve it…so that Jamaica becomes open to trillions of dollars of investable funds, to create opportunities for our people,” Clarke added.
Clarke also mentioned that Jamaica had a ranking of CCC, which is known as a junk credit rating status.
