Moody's: High debt affects Jamaica ratings

In its annual report on Jamaica's sovereign ratings, Moody's Investors Service said its B3 foreign- and local-currency government bond ratings and stable outlook reflect the country's low economic development, moderate institutional strength, weak government finances and high susceptibility to shocks.

Jamaica's per capita GDP is higher than the B-rating category median, but annual growth has averaged less than 1% in the last decade, Moody's said.

The country has been in recession for the past three years, the report said.

Lack of growth makes reducing the debt burden difficult, the agency said, and the country's debt-to-revenues ratio remains among the highest in its rating category.

While the 2010 domestic debt exchange improved the government's fiscal position by dramatically reducing the interest burden, debt levels remain much higher than those of most of Jamaica's rating peers, giving the country little room to maneuver, Fitch said.

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