S&P Global Ratings upgraded Jamaica’s sovereign credit rating to ‘BB’ from ‘BB-’ on Thursday, citing a decade of exceptional fiscal discipline, but the accompanying analysis underscores the critical challenge the island now faces: Spurring economic growth after conquering its debt crisis.

The move from BB- to BB signifies an important improvement in creditworthiness, indicating a lower expectation that Jamaica will default on its debts. In S&P’s scale, both are non-investment grade, but ‘BB’ is the highest rating within that speculative-grade tier. The agency affirmed its ‘B’ short-term rating, which is several notches lower and applies to debt obligations due within one year. Another upgrade would take Jamaica’s credit rating to BB+ which is just one level below investment grade.

This upgrade reflects a dramatic financial turnaround. Jamaica’s debt-to-GDP ratio has plummeted from nearly 145 per cent in 2013 to around 62 per cent currently, quantifying the scale of its fiscal discipline.

The agency assigned a positive outlook, signalling that another upgrade is possible within 18 months if fiscal progress continues.

“The positive outlook reflects an at least one-in-three chance we could raise the rating if the Government’s interest burden falls, and fiscal performance remains strong,” the agency said in its report.

The decision rewards a rare political consensus that has embedded debt reduction into national policy, yet also spotlights the paradox of world-class fiscal management coexisting with persistently anaemic growth.

The upgrade is rooted in what S&P described as a “broad policy consensus that has become embedded in Jamaica’s political culture”. This cross-party support for fiscal responsibility has enabled the country to achieve a unique distinction.

“Jamaica is the only one of the 141 sovereigns rated by S&P Global Ratings that has achieved an annual primary fiscal surplus above 3 per cent of GDP for the past 10 years,” the report stated, a feat achieved despite major hurricanes and the pandemic.

This discipline is projected to drive net government debt below 50 per cent of GDP this year, outperforming official targets. The rating agency’s assessment also incorporated recent large financings, including US$480 million in senior secured notes issued by Kingston Airport Revenue Finance LLC in October 2024 and US$400 million issued by Montego Bay Airport Revenue Finance Ltd in July 2025. It concluded that these transactions “do not weaken our government debt assessment”. These factors, combined with strengthened institutions like the legally independent Bank of Jamaica, underpinned the improvement in S&P’s assessment. The country’s proactive disaster risk framework, which includes a catastrophe bond and contingency funds, was credited with improving resilience after Hurricane Beryl.

Despite these institutional gains, the report presents a sobering view of Jamaica’s growth potential, identifying it as the key hurdle to further credit improvements.

“Nevertheless, growth remains constrained by high security costs; perceived corruption; low productivity; low business competitiveness; and vulnerability to external shocks,” S&P said. The agency expects the economy to rebound to just 2 per cent growth in 2025 before settling into a long-term average of 1 per cent to 2 per cent, a rate “below that of sovereigns in the same GDP category”.

This creates a clear crossroads for policymakers: how to shift focus from austerity to expansion without undermining hard-won fiscal credibility.

The positive outlook means a further upgrade is within reach. S&P said it could raise the rating “if Jamaica’s debt burden improves as its interest-to-revenues ratio decreases”, but significantly added that it could also act if “the economic growth rate improves and converges with that of peers”.

The report noted that the government’s financing needs will be met through domestic borrowing and concessionary multilateral loans. It also assessed large airport financing deals as not weakening the debt profile.

While vulnerabilities remain, including the high proportion of foreign-currency debt, the upgrade confirms Jamaica has successfully exited its debt crisis. The positive outlook now sets the stage for the country’s next act: proving it can translate fiscal stability into sustainable economic growth for its population.

S&P Global Ratings raised its long-term foreign and local currency sovereign credit ratings on Jamaica to ‘BB’ from ‘BB-’.

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