Jamaica’s Struggles: Overcoming Economic Turmoil and Revitalizing Growth

Despite recent rapid growth, Jamaica’s economy has struggled for years due to chronic budget deficits and external events such as the 1973 oil price shock. This led to a recession and devaluation, increased borrowing for critical imports, and ultimately required Jamaica to seek bailout loans from the IMF and World Bank. The loans came with harsh austerity measures that resulted in cuts in public sector employment and investment. Despite years of austerity, growth rates steadily declined, government debt rose alarmingly by 2012, and youth unemployment was high. Finance Minister Peter Phillips warned in 2013 about the survival of Jamaica as a viable nation-state if drastic measures were not taken.