Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
The United States remains Jamaica’s main trading partner, accounting for 40 percent of total trade. Jamaica’s other major trading partners are China, Brazil, Canada, Japan, the Netherlands, Trinidad and Tobago and the UK. Jamaica is attractive to U.S. exporters due to its geographic proximity and access to shipping lanes; relatively large English-speaking market; stable democracy and strong commercial and cultural affinity; and, improving business climate, as reflected in the World Bank 2013 to 2020 Doing Business Reports.
Jamaica has committed to macroeconomic discipline since it entered into International Monetary Fund (IMF) guided economic reforms in 2013. Through these programs, Jamaica restructured its domestic debt and undertook ambitious economic and legislative reforms to include the elimination of sector-specific tax incentives and waivers and improving the business climate. By the time the program ended in 2019, Jamaica had successfully passed all its reviews with the macro-economic indicators showing major improvements. The debt to GDP ratio moved from a peak of almost 150 percent to below 90 percent and inflation has averaged low single digits and unemployment fell to a record low of 7.2 percent. The Net International Reserves has remained near US$3.0 billion (over 30 weeks of goods and services imports), up from US$1 billion at end December 2013, while the current account deficit has improved to low single digit from over 10 percent of GDP in 2013.
The gains from the program allowed government to propose what was considered one of the most positive budgets in early 2020, increasing capital expenditure and social spending and lowering consumption taxes. However, by April 2020, it became evident the first order effects of the COVID-19 pandemic would derail the economic recovery, forcing government to revise its budget. By the end of the year, output had declined by almost 10 percent, the debt to GDP ratio increased to over 100 percent and unemployment remained in double digits. There are signs the economy is beginning to improve on the back of the recovery in tourism, with unemployment moderating to 8.9 percent in January 2021. Tax revenues have also outpaced projections suggesting an uptick in economic activities.