Ratings Analyst at Fitch, Charles Seville, says Jamaica still has a long way to go before the country can be considered “investment grade”.
Mr. Seville was speaking with Nationwide News a day after the respected international credit ratings agency upgraded Jamaica to a B-plus for its Long-Term Foreign-Currency Issuer and Local Currency Issuer Default Ratings. It’s the best rating for Jamaica in thirteen years. International investors still consider the country as highly speculative.
Charles Seville is Co-Head of Americas Sovereign Ratings at Fitch. He was one of the analysts who worked on Jamaica’s recent rating by the agency, which is one of the big three credit ratings agencies globally.
Mr. Seville says the country’s debt reduction played a major role in the improved rating. His team of analysts believe the island can hit the target of reducing debt to GDP to 60-percent by 2025. But, he has a warning:
Indeed, a lot can happen in six years. And, although Jamaica has done a lot since starting an Extended Fund Facility with the IMF in 2013, a great deal remains to be done; particularly, getting the economy to grow.
Mr. Seville says countries that have been successful in reducing their debt burden have usually accomplished this through substantial economic growth, more so than paying down debt as Jamaica has been doing.
Last evening, State Minister in the Finance Ministry, Fayval Williams, welcomed the Fitch upgrade, and set her sights on the next category, and eventually achieving investment grade status.
Investment grade starts at triple-B-minus. Jamaica is still four notches away from that status, in the zone considered highly speculative, and which some refer to as “junk bonds”.
Mr Seville says despite the optimism, investors still remember that Jamaica is a fairly recent defaulter, having done two debt swaps in the past eight years.