Jamaica is situated in the heart of the Caribbean. Its closest neighbors are Cuba to the north and Hispaniola (Haiti/Dominican Republic) to the east. A member of the British Commonwealth, Jamaica became an independent nation in August 1962. Kingston, the capital city, and commercial center, is located in the south eastern part of the country. Montego Bay, the second largest city and a major tourist destination, is in the North West.

Fast Facts

Capital City:	Kingston
Governor General:	Patrick Allen
Prime Minister:	Bruce Golding
Official Language:	English
Currency:	Jamaican Dollars
Exchange Rate:	J$60 = US$1 (approximately)
Land Area:	10,991 square kilometers
Population:	2,825,928 inhabitants
Climate:	Tropical

Market Overview

The Jamaican economy plunged into recession during 2009, due largely to impact of the global economic meltdown. The global crisis has been particularly harsh on Jamaica because of its prolonged battle with structural problems such as declining production and productivity and high debt. To address these problems, Jamaica embarked on an ambitious economic reform agenda in 2010, led by the implementation of the Jamaica Debt Exchange to swap high interest domestic debt for lower rates and longer maturities. This was followed by the signing of a USD 1.27 billion Stand-by Arrangement with the IMF in February 2010. By the end of the year some positive signs emerged, underpinned by fiscal consolidation efforts aimed at reducing the fiscal deficit and improving the primary balance. The treasury also reaped early results from the Jamaica Debt Exchange, as interest payments continue to lag projections. And although tax collections lag target, they were still above 2009 levels due to enhanced tax administration.
The JDX has also impacted the financial markets, with benchmark interest rates falling to a low of 7.5 percent at the end of 2010, the lowest rate registered in almost three decades. This occurred against the background of a 4.4 percent appreciation in the local currency, buoyed by unusually high inflows of private and public capital. As a result, the stock of Net International Reserves (NIR) jumped to USD 2.2 billion.
But despite the appreciating exchange rate and subdued domestic demand, inflation for 2010 increased to 11.7 percent relative to the 10.2 percent recorded in 2009. Inflationary pressures were driven by weather related and policy induced shocks. In particular, the passage of Tropical Storm Nicole in the latter part of 2010 had a major impact on domestic food supply and by extension prices. The hike in “sin taxes” and more importantly soaring commodity prices in general and food and energy prices in particular also fuelled inflation.
However, the austerity measures associated with the bold reform agenda had a dampening effect on growth. With the government forced to run a tight ship to meet its ambitious fiscal targets, it has been unable to introduce the countercyclical measures required to stimulate the economy. Importantly, the GoJ has not been able to satisfy the wage demands of a number of public sector workers owed retroactive salaries. This combined with the cut back in capital projects have stymied the demand required to fuel an economic recovery. As a consequence, real GDP is estimated to have decreased for a third consecutive year.
The U.S. remains Jamaica's main trading partner, accounting for around 40 percent of total trade. On average, Jamaica imports and exports 45 and 30 percent of its goods from and to the U.S., respectively. Jamaica's other major trading partners in order of volume are Trinidad and Tobago, the UK, Canada, Japan, and China.
Bilateral relations between Jamaica and the United States are relatively good, although the two countries disagree on a few specific issues. Most notable has been in regard to relations with Cuba. In 2009 the GOJ also diverged from the past and has been less cooperative with the USG in its response to requests for the extradition of alleged leaders of high-profile criminal organizations. This has raised concerns about GOJ commitment to addressing crime and violence problems on the island and will be closely monitored during 2010.

Best Prospects

Building Products
Telecommunications Equipment
Safety and Security Equipment
Drugs/Pharmaceuticals
Automotive Parts and Service Equipment

For details click on Country Commercial Guide document at the right column and go to Chapter 4

Main Topics

Country Commercial Guide
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Print | Last Updated: 10/13/11 4:44 PM