Business
Simpson-Miller: Jamaica would benefit greatly from a Greece-style bailout
The IMF accord had paved the way for Moody’s Investors Service to raise Jamaica’s credit rating and the IMF, which devised the debt exchange, to approve a 27 month, US$1.27 billion stand-by credit.
The governing People’s National Party (PNP) has since agreed to boost taxes and limit pensions as part of reaching a new IMF accord. Jamaica will not tax the most vulnerable, said Simpson-Miller, who is island’s third prime minister since October and previously served in the post in 2006-2007.
Economic growth will rise to 2.4 percent this year from 1.4 percent in 2011, according to the IMF.
In the same category as Argentina and Belarus
The stalled agreement with the IMF “further detracts” from Jamaica’s credit rating, Standard & Poor’s (S&P) said in a February 22 report.
The country’s debt is rated B- by S&P, while Moody’s rates Jamaica at B3, or six steps below investment grade. The Moody’s rating puts the island of 2.9 million in the same category as Argentina and Belarus.
The extra yield investors demand to hold Jamaica’s dollar bonds instead of U.S. Treasuries has fallen 5 basis points, or 0.05 percentage point, since Simpson-Miller took office on January 5 to 8.14 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.
The Jamaican dollar has fallen 0.1 percent this year to 86.42 per U.S. dollar.
