Fitch Ratings has upgraded -- Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B-' from 'CCC'; assigns Stable Outlook;
-- Senior unsecured foreign and local currency bonds to 'B-' from 'CCC';
-- Country Ceiling to 'B' from 'B-';
-- Short-term foreign currency IDR to 'B' from 'C'.
KEY RATING DRIVERS
The upgrade of
-- Reduced financing risks due to fiscal consolidation and the lengthening of domestic debt repayments achieved through the National Debt Exchange (NDX) in
-- The country has preserved broad macroeconomic and financial stability despite the NDX and the continued depreciation of the Jamaican dollar. The Jamaican dollar depreciated by 13 percent in 2013 and the currency has continued to fall in 2014 reflecting limited
-- Access to multilateral funding has eased external financing constraints, while the current account deficit declined to 10.7 percent of GDP in 2013 from 12.9 percent in 2012, driven by weaker domestic demand and lower imported oil prices. Nevertheless,
-- Growth underperformance has become chronic in
The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently balanced. The main risk factors that, individually or collectively, could trigger a positive rating action are:
-- Higher economic growth and improved fiscal performance leading to faster debt reduction;
-- Reduced external vulnerabilities through the sustained accumulation of international reserves and a decline in external financing needs.
The main risk factors that, individually or collectively, could trigger a negative rating action are:
-- Pervasive non-compliance with the IMF program, leading to a prolonged interruption in disbursements and renewed concerns about fiscal and external financing;
-- A sustained fiscal deterioration leading to higher unfavorable debt dynamics;
-- Confidence shocks that lead to macroeconomic and financial sector instability.
The ratings and Outlooks are sensitive to a number of assumptions:
-- Fitch assumes that
-- Fitch assumes that oil prices will remain stable and that the Petrocaribe agreement will remain in place over the forecast period.
-- Fitch's fiscal and external projections do not factor in weather-related shocks over the forecast period. Such events would require additional policy adjustments to maintain fiscal consolidation and macroeconomic stability.
-- 'Sovereign Rating Criteria' dated
-- 'Country Ceilings' dated
Additional information is available on fitchratings.com
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Fitch Ratings has upgraded
-- Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B-' from 'CCC'; assigns Stable Outlook;