Finance Minister Fayval Williams says the Government remains committed to fiscal discipline as it works toward achieving an investment-grade credit rating, even amid rising inflation risks and global uncertainty.

Speaking at the Caribbean Policy Research Institute (CAPRI) budget breakdown forum last Thursday, Minister Williams said the Administration would not depart from its fiscal path, despite pressures from rising US tariffs and tightening global conditions.

“As you know, and as you’ve said, increasing tariffs, which really are increases in taxes, will have the effect of raising prices,” she said. “So our goods, when they go to the US, they’re going to cost more to US businesses and to US individuals there.”

She noted that the immediate impact could be a general rise in inflation, although its severity would depend on how much disposable income consumers still have.

“If your income remains the same and prices are going up, chances are you will start to buy a little bit less of that good,” she continued. “How much that will be, I don’t really know yet because you have countervailing forces against that.”

Williams also emphasised the role of the Bank of Jamaica (BOJ) in managing any resulting inflation, underscoring the central bank’s independence and its mandate to respond when necessary.

“We do have a central bank with a policy mandate for inflation targeting and the core inflation in the four to six per cent range. I know that the BOJ is very vigilant when it comes on to inflation. Unfortunately, that would mean interest rates rising, because that’s a primary tool that’s used,” she said.

“Maybe as a second effect, once they begin to see what the level of inflation is and if they think about how this is going to keep translating in the economy, then that is when they may move. I’m not predicting — I have no business talking about inflation and the direction of it. It’s a policy mandate of the Bank of Jamaica. But just thinking through logically how things may play out, that’s how I see they could play out,” Williams said.

Her comments come as Jamaica edges closer to investment-grade status following a series of credit rating upgrades. As of February 2025, Jamaica holds a BB- rating from both Standard & Poor’s (S&P) and Fitch Ratings, and a B1 rating from Moody’s — each with a positive outlook. Investment-grade status begins at BBB- for S&P and Fitch and Baa3 for Moody’s. Jamaica remains one to two notches below the threshold, but the agencies have signalled continued confidence in the country’s trajectory.

The upgrades reflect Jamaica’s improved debt metrics, consistent primary surpluses, and a strong policy framework, including inflation-targeting and fiscal rules that have held steady across political cycles.

“We would love to get to investment grade,” Minister Williams said. “It’s one of the significant criteria for a country to get into that category.”

Securing an investment grade rating would allow Jamaica to borrow at lower interest rates on international markets and expand access to a broader range of institutional investors, including pension funds and sovereign wealth managers that are restricted from investing in speculative grade assets. It would also strengthen the country’s financial reputation globally, making it easier to attract long-term capital for infrastructure, development, and economic resilience.

Still, progress has been uneven. Jamaica’s debt-to-gross domestic product (GDP) ratio closed the last fiscal year at 68 per cent, higher than the 64 per cent previously projected. Former Finance Minister Dr Nigel Clarke attributed the shortfall to weaker-than-expected GDP growth due to weather-related shocks but maintained that the 60 per cent debt target by 2028 remains on track.

The Government has also faced delays in public investment. Although capital spending allocations remain high, procurement challenges have pushed several large infrastructure projects into the current fiscal year.

“When you look at the capital numbers, we would definitely want it to be higher,” Williams said. “But we have to work with what we have at the moment.”

Despite these setbacks, the Government has resisted calls for increased spending — even in an election year. The 2024/25 Budget contains no new social transfer schemes or populist measures, a move Williams said was deliberate.

“To come here in an election year and throw all that away — for us, that was not even a consideration,” she said.

Fitch Ratings has projected that Jamaica will meet its 60 per cent debt target within the next three years, assuming fiscal surpluses are sustained and inflation remains under control. However, rating agencies have warned that any reversal in policy direction or failure to execute on capital spending could delay the country’s upgrade to investment grade.