Jamaica Economy

Jamaica Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax System

Basic data

According to Standard and Poor, in 2022 GDP growth is expected to be 5.5%. Inflation for 2021 reached 5.6%. Unemployment remained around 10% in 2021, falling to 8.5% at the end of the year. The economic impact of Covid-19 has not been as drastic as expected thanks to the construction boom (11% increase) and tax cuts, although the public debt is rising. The measures to limit the spread of the coronavirus had a major impact on the loss of income from tourism. On the balance of payments side, things have been improving significantly for Jamaica over the past five years, thanks to higher oil prices contributing to a higher import bill. Check ebizdir for economical facts of Jamaica.

Jamaica’s main exports are inorganic chemicals, precious metal compounds and isotopes. Jamaica is the 5th largest exporter of bauxite in the world. In addition, Jamaica exports mineral fuels, oils, distillation products, beverages, fuels. Food, consumer and industrial goods, fuel, machinery, transport equipment and construction materials are mostly imported to the island.

Table from MOP + additionally balance of payments, indebtedness/GDP.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 1 -10.3 4.3 3.1 2.1
GDP/population (USD/PPP) 10,550.00 10,200.00 11,010.00 11,680.00 12,260.0
Inflation (%) 3.9 5.6 5.7 7.1 4.6
Unemployment (%) 7.2 10.8 10.4 9.9 9.3
Export of goods (billion USD) 2 1.8 1.7 1.8 1.9
Import of goods (billion USD) 6.1 4.8 5.9 7.2 8
Trade Balance (Billion USD) -3.5 -2.9 -3.5 -4.6 -5.2
Industrial production (% change) ON ON ON ON ON
Population (millions) 2.7 2.7 2.7 2.7 2.7
Competitiveness ON ON ON ON ON
OECD export risk 06.VII 06.VII 06.VII ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -1
Public debt (% of GDP) 91
Current account balance (billion USD) -0.5
Taxes 2022
AFTER 33.3%
F.O 25%
VAT 15%

International Monetary Fund programs from 2013-19 enabled the country to improve its fiscal situation. The government strives for a conservative fiscal approach aimed at reducing the share of debt in GDP and at the same time supporting the income of the population (in March, a 28.5% increase in the minimum wage was announced). In 2020, however, the country had to receive emergency aid from the IMF, similar to many other countries in the region.

The share of public debt to GDP is just below 100%. In the years 2013-2019, the budget surplus was up to 6%. Such a high surplus is unrealistic in the covid and post-covid years, but the country seems to be managing to maintain a balance between the emphasis on economic recovery and fiscal balance.

Banking system

The Bank of Jamaica (BoJ), www.boj.org.jm, is responsible for monetary policy and the stability of the banking system. It issues licenses to banking institutions and controls their management. The Bank of Jamaica (BoJ) is expected to continue raising rates from the current 4% to a peak of 7% in the second half of the year to keep inflation to a minimum. The target range is 4-6%. In real terms, however, rates will remain negative (year-on-year inflation exceeded 10% in February). The BoJ will also maintain liquidity support for the financial system as the slow recovery from the pandemic continues to pose challenges for financial stability. Rates will remain relatively accommodative in real terms over the medium term, assuming the current surge in inflation moderates.

Top banks:

National Commercial Bank Jamaica Limited, www.jncb.com

The bank of Nova Scotia Limited, www.scotiabank.com.jm

Sagicor Bank Jamaica Limited, www.sagicorbankja.com

First Carribbean International Bank (Jamaica) Limited, www.cibcfcib.com

First Global Bank Limited, www.firstglobal-bank.com

Tax system

Personal income tax is 25% of taxable income (not exceeding 6 million Jamaican dollars [JMD] per year). Taxable income derived above 6 million JMD per year is subject to an income tax of 30%. The so-called regulated firms (those regulated directly by the Bank of Jamaica or the MF of Jamaica) pay a rate of 33.33%. Jamaica applies a system similar to VAT, which it refers to as the GCT, General Consumption Tax. This tax is valid from 2020 reduced to 15% and applies to all manufacturing and commercial transactions (excludes telephone services, which are taxed at 25% and tourism services, which are taxed at 10%). The annual limit for GCT registration is currently 10 million JMD.

Jamaica Economy