In recent years, Jamaica has experienced rapid and potentially sustainable economic growth. This unexpected development has been attributed to effective policymaking in a supportive political environment, despite many challenges. However, some argue that the country’s economic recovery came at the expense of preparedness for the effects of climate change. With climate change posing new dangers to Jamaica’s core sectors of agriculture and tourism, the country’s economic future may become more problematic.
Throughout the 1970s, successive Jamaican governments ran chronic budget deficits due to external events beyond their control. As an oil importer, Jamaica suffered from the 1973 oil price shock, which raised import costs and led to a recession and devaluation. This forced increased borrowing to purchase critical imports. The situation worsened when U.S. interest rates increased in the early 1980s, leading to rising debt levels. To address this issue, Jamaica sought bailout loans from the International Monetary Fund and World Bank in the 1980s but had to implement harsh austerity measures as conditions attached to these loans required significant cuts to public sector employment and public investment by the government.
These measures had a significant impact on the economy, with average growth dropping from 2.3 percent in the 1980s to 0.9 percent in the 2000s. From 2010 to 2012, even saw negative growth by an average of 0.2 percent annually despite years of austerity measures implemented by government debt increased from 91.8% of GDP in 2000 to 143.9% in