As debate rages whether Jamaica's Petrocaribe buy back was a good deal, the Ministry of Finance has revealed that the transaction will shave US$250 million off the country's debt. According to a statement from the Ministry, the saving comprises principal and interest repayments.
On July 23, Jamaica raised US$2 billion on the international capital market to buy back a portion of its Petrocaribe debt. The Finance Ministry said the deal is expected to reduce Jamaica’s debt-to-GDP-ratio by 10%.
It explained that further reducing the country’s debt-to-GDP will boost its performance under the Economic Reform Programme, improve Jamaica's standing with international rating agencies and make it more attractive to local and international investors.
The programme sets the target ofreducing the debt-to-GDP to 96% in 2020 and 60% in 2025. This is down from 145% two years ago.
The Finance Ministry's statement comes ahead of a press conference, called this morning by the Jamaica Labour Party, on the Petrocaribe buy back. It will be addressed by Opposition Spokesman on Finance Audley Shaw.
Mr. Shaw has stated that replacing low-cost debt with high cost debt is a bad deal for Jamaica. He has also taken the government to task for what he said was its disregard for Parliament and the people of Jamaica in not communicating information about its overseas debt raising exercise.
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