KINGSTON, Jamaica— Credit rating agency Moody’s has said that Jamaica’s large primary surplus and adequate international reserves provide the Government with ample buffers to limit the immediate credit-negative effect that travel restrictions will have on the tourism industry because of the novel coronavirus (COVID-19) outbreak. 

In an issuer comment released today, Moody’s noted that the travel restrictions will exacerbate the slowdown in tourism and the economy. However, the agency said compared with other Caribbean islands, Jamaica’s vulnerability to tourism is moderate. 

“While we expect growth to slow from declining tourist arrivals, the effect on Jamaica’s external accounts will be partially offset by the high import content of tourism earnings, which will reduce the country’s import bill. Moreover, lower oil prices will also have a positive effect on Jamaica’s current account,” Moody’s said. 

“We believe that the country has sufficient fiscal and external buffers to cope with a shock in the tourism industry, limiting the immediate credit negative effect,” the agency added.

More in tomorrow’s Jamaica Observer