Debt exchanges and inflation targeting

Jamaica's public debt reached about 147 percent of GDP in the early 2010s, among the highest in the world, and interest payments absorbed much of the budget. The government carried out a domestic debt exchange in 2010 and a second in 2013 as part of an IMF-supported Extended Fund Facility, accepting longer maturities and lower interest rates, and held primary surpluses of around 7 percent of GDP for years. The Bank of Jamaica supported the programme by building reserves and allowing the exchange rate to float, and in 2019 it formally adopted inflation targeting with a target range of 4 to 6 percent. The debt ratio fell to around 94 percent of GDP by 2019, and inflation has largely stayed within or near the target range since then, with the main disruptions coming from hurricanes and, in 2022, from global fuel and food prices.