US ratings agency Moody’s upgraded Jamaica’s Government bond rating and government-related entities to Caa2 from Caa3 and is maintaining a positive outlook, the agency announced yesterday.

The agency said the decision to upgrade Jamaica’s rating was driven by the country’s “fiscal consolidation and strong commitment to structural reforms”, and its “improving balance of payments position and reduced external vulnerabilities”.

The agency said on its website yesterday, “The positive outlook reflects our expectation that Jamaica will sustain the reform momentum under the IMF-supported programme, solidify fiscal adjustment to put government debt metrics firmly on a downward trajectory.”

This rating action also applies to the Government of Jamaica’s related entities: Air Jamaica Limited, and the National Road Operating and Constructing Co. Ltd, the agency said.

As a result of this rating action, the long-term foreign currency bond ceiling changed to B2 from B3. The long-term foreign currency deposit ceiling also changed to Caa3 from Ca. The long-term local currency bond and deposit ceilings changed to B1. The short-term foreign currency bond and deposit ceilings remain unchanged at NP.

Moody’s said that the rating could move up in the future if there was sustained fiscal consolidation to reduce government debt ratios and higher GDP growth. On the other hand, the rating could move down if there was a failure to avoid a persistent increase in debt ratios, or a reversal of fiscal reforms.