Jamaica - Systematic Country Diagnostic : Boosting Recovery and Sustainable Economic Growth

This first Systematic Country Diagnostic (SCD) for Jamaica comes at a pivotal time. The country is seeking a return to the pre-COVID-19 path of fiscal consolidation amid a slow COVID vaccine roll-out, high inflationary pressures, and persistent structural constraints to growth.1 COVID-19 laid bare existing vulnerabilities, causing real Gross Domestic Product (GDP) to contract a record 10 percent in 2020, with a near closure of most tourism activities depressing incomes for more than 40 percent of the country's workers. The government deployed countercyclical fiscal measures to stem the economic downturn, while strengthening the health sector, supporting the financial sector, and mitigating the impact on poor households through further income support. Inflation had surged to 11.8 percent as of April 2022, posing a growing threat to the purchasing power of the poor in particular. The monetary authorities have been proactive, but rising interest rates could undermine the ongoing recovery. In 2020, the government committed to ambitious targets under the Paris Agreement to transform Jamaica into a low-emissions and climate-resilient economy