--Foreign and local currency Issuer Default Ratings (IDRs) 'B+';
--Country ceiling 'BB-';
--Bond obligations 'B+/RR4'.

The Rating Outlook is Stable. Recovery rating 'RR4' implies average recovery prospects given default. For more information on recovery rating methodology, see below.

Jamaica's ratings are supported by its political stability, its modest external indebtedness and an impressive commitment of authorities to maintain fiscal consolidation to reduce public debt despite the various external shocks the island has faced in recent years.

'A strong consensus on macroeconomic policies geared towards reducing the public debt burden is a significant credit positive for Jamaica in this rating category. It reduces the risk of a marked policy shift in the event of a change of government', said Shelly Shetty, a Senior Director in Fitch's sovereign group. Over the past two fiscal years, the society at large has shouldered the burden of fiscal adjustment, as public-sector workers sustained heavy real income losses under the aegis of the Memorandum of Understanding ('MOU') agreement between the government and the public sector labor force. Notwithstanding the spending pressures and the possibility of elections in 2006, the government has been able to secure another MOU with a significant proportion of the public sector workers, which envisages little growth in real wages.

Jamaica's ability to run significant primary surpluses (10-11% of GDP) has allowed for a steady reduction in public debt. Fitch believes that while meeting the fiscal goals set in the medium-term program may be challenging, the basic thrust of fiscal consolidation is likely to continue. After a significant deviation from the target in 2005/06, the authorities are targeting a slight reduction of fiscal deficit to 2.5% of GDP in 2006/07, basing it on an ambitious revenue growth. Rather than increasing tax rates and risking reduced compliance, the authorities have taken efforts to strengthen tax administration, which bore fruit in the last few months of fiscal-year (FY) 2006. In view of the spending rigidity, the government will have to rely on greater tax collection to meet its fiscal targets.

Jamaica's ratings are constrained by a very high public debt burden of 130% of GDP, which is twice the 'B' median, and heavy financing needs. In addition, public debt is highly sensitive to changes in interest and exchange rates. Finally, while public finances are on the mend, they are extremely vulnerable to external and weather-related shocks. An escalation of oil prices and/or a severe hurricane could test the resolve of the authorities to meet its fiscal target in any given year.

Another constraint preventing a faster reduction of public debt is Jamaica's anemic growth performance over the past decade. Jamaica's growth performance is among the worst in the 'B' category, with its 2001-2005 average growth of 1.4% comparing poorly with the 4.6% 'B' median. Jamaica's growth performance is hampered by crowding out from the large fiscal deficits, a heavy public debt burden, a significant vulnerability to external and weather-related shocks, volatility in the exchange and interest rates, and a wide range of other structural constraints, such as low labor productivity, and a high crime rate. However, growth prospects appear to be better for 2006-2008, partly owing to the expected foreign direct investment in the country.

Similar to other island economies and other countries in the 'B' category, Jamaica runs a significant current account deficit, which reached nearly 10% of GDP in 2005. However, the deterioration reflects the impact of high oil prices and higher imports owing to expansion in investment. Fitch expects the current account deficits to remain large during its forecast period due to heavy investment in the tourism, mining and infrastructure sectors, which should contribute to increasing the capacity of the country to earn more foreign exchange in the medium term. In addition, Fitch expects most of the current account deficit to be financed by foreign direct investment, thereby reducing the vulnerability of external accounts.

Going forward continued fiscal consolidation will be the linchpin of Jamaica's credit story. A significant reduction in the public debt burden may be required before Jamaica could move up the rating scale. On the other hand, persistent fiscal slippages leading to a further escalation of the debt burden would be viewed negatively.

Fitch will hold a teleconference at 2 p.m. EDT on Wednesday, August 30, 2006 to explain the rating rationale underpinning Jamaica's sovereign ratings. A further teleconference notice will have additional information.

Fitch's Recovery Ratings (RR), introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. A broad overview of Fitch's RR methodology as it relates to specific sectors, including a Case Study webcast, can be found at http://www.fitchratings.com/recovery.

Contact: Shelly Shetty +1-212-908-0324 or Theresa Paiz-Fredel +1-212-908-0534, New York.

Media Relations: Christopher Kimble, New York, Tel: +1 212-908-0226.