GENERAL OVERVIEW OF

MACROECONOMIC

ISSUES FACING THE

CARIBBEAN

Ian Durant

Deputy Director, Department of Economics

10 July 2017

THE REGIONAL

PICTURE

POVERTY

UNACCEPTABLY

HIGH IN MOST

COUNTRIES

Source: Statistics Offices

58.5 (2012)

41.3 (2009)

37.7 (2008)

36.1 (2006)

36.0 (2009)

30.2 (2009)

29.0 (2005)

28.8 (2009)

22.0 (2012)

22.0 (2002)

21.8 (2009)

19.3 (2009)

18.0 (2006)

17.0 (2007)

16.5 (2009)

9.3 (2001)

5.8 (2009)

1.9 (2008)

HAI

BZE

GRE

GUY

MON

SVG

SLU

DOM

TCI

BVI

SKN

BAR

ANT

TT

JAM

BAH

ANG

CAY

Poverty Rates(% of Population below Poverty Line)

LOW GROWTH

ENVIRONMENT

Source: CDB estimates, IMF, UN

(6)

(4)

(2)

0

2

4

6

8

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Real GDP growth (%) 2006 to 2016

World Advanced economies

Emerging market and developing economies CDB BMCs

Other SIDS

2016

ECONOMIC

GROWTH

Source: Statistics Offices, ECCB, CDB estimates

3.84.3

0.0

1.6

-0.8-0.6

3.2

1.0

1.9

3.3

1.11.4 1.3

3.0

0.9

2.0

-10.4

-5.7

4.4

-1.3

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2016 GDP Growth (%)

COMMODITY

PRICES STILL

RELATIVELY LOW

&

RATE OF

VISITORS

ARRIVALS HAS

DECLINED

50

60

70

80

90

100

110Gold Index: Jan 12 – May 17

0

20

40

60

80

100

120Crude (US$/bbl) Jan 12 - May 17

Stayover Arrivals

Sources: IMF, CTO

2014 2015 2016

+5.9%+4%

+1.7%

IN GENERAL,

UNEMPLOYMENT

HAS NOT FALLEN

SUFFICIENTLY

Source: Statistics Offices

-

5.0

10.0

15.0

20.0

25.0

BAH BAR BZE CAY JAM SLU TT SUR

%

Unemployment Rate

2004 2010 2016

FDI HAS VARIED,

WITH NO

SIGNIFICANT

INCREASE

Source: UNCTAD

0

0.1

0.2

0.3

0.4

0.5

0.6

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

%

US

D M

illio

ns

Caricom: Inward FDI 2000 - 2015

Inward FDI Share of World FDI (RHS)

KEY TO A

GOOD

INVESTMENT

CLIMATE

Source: World Bank Group

Country 2017 2016

Difference 2016-

2017

NZ 1 1 0

SIN 2 3 1

MAU 49 42 -7

JAM 67 65 -2

SLU 86 78 -8

TT 96 92 -4

DOM 101 95 -6

BZE 112 110 -2

ANT 113 107 -6

BAR 117 115 -2

BAH 121 120 -1

GUY 124 140 16

SVG 125 123 -2

SKN 134 127 -7

GRE 138 131 -7

SUR 158 155 -3

HAI 181 180 -1

Regional

Average 120 117 -3

REMITTANCES

CONTINUING TO

INCREASE

GRADUALLY….

-

1,000

2,000

3,000

4,000

5,000

6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US

D M

illio

ns

Total Inward Remittances 2000-2016

Source: World Bank

…AND ARE

STILL

SIGNIFICANT

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

ANT BAR BZE DOM GRE GUY HAI JAM SKN SLU SVG SUR TT

Remittances as a Share of GDP 2016

Source: World Bank

HIGH DEBT

ACROSS

BMCs

Source: Statistics Offices, Central Banks

Debt as a % of GDP

2015 2016 Change in

%

Primary

Balance (%

of GDP)

Real GDP

growth

BAR 140.4 145.3 4.9 -5.0 1.6

JAM 124.8 120.3 -4.5 7.7 1.4

ANT 99.1 93.6 -5.5 7.0 4.3

BZE 81.7 90.4 8.7 -1.1 -0.8

DOM 85.5 87.7 2.2 0.0 1.0

GRE 91.7 83.4 -8.3 5.3 1.9

BAH 66.9 69.3 2.4 0.4 0.0

SLU 65.4 66.4 1.0 2.2 0.9

SKN 70.6 65.6 -5.0 1.9 3.0

TT 50.0 56.6 6.6 -4.1 -5.7

SUR 43.5 55.5 12.0 -5.3 -10.4

GUY 48.3 49.6 1.3 -2.0 3.3

ANG 24.6 44.3 19.7 3.3 3.8

HAI 30.1 33.6 3.5 -1.0 1.1

DAMAGE

FROM

EXTREME

WEATHER

EVENTS

Country Year Disaster Damage

(% of

GDP)

Belize 2000 Storm 33

Grenada 2004 Hurricane 200

Guyana 2005 Flood 36

Dominica 2009 Hurricane 35

Haiti 2010 Earthquake 121

Saint Lucia 2011 Hurricane 34

Dominica 2015 Flood 96

Source: EM-DAT, IMF

DE-RISKING AND

ACCESS TO

GLOBAL

FINANCIAL

SERVICES

Source: IMF

CBR Withdrawal

Key Drivers

AML/CFT

Sanctions

Profitability

High Risks

Impacts

Trade

RemittancesFinancial Stability

CHANGE IN

TRANSACTIONS

AND CBRs

SWIFT

Volume (%

change)

SWIFT

Value (%

change)

CBRs

(%

change)

Antigua and Barbuda 4.0 1.9 -12.6

Bahamas 23.8 -38.5 -15.1

Barbados 13.4 -50.8 -13.6

Belize -44.6 -44.2 -16

Cayman Islands 20.1 -31 -9.9

Dominica 3.4 -14.3 -9.7

Grenada 19.1 13 13.5

Guyana 15.2 -21.2 -0.2

Haiti 26.2 10.9 -11.8

Jamaica 38.5 35.4 13.7

St Kitts and Nevis 12 4 -18.3

Saint Lucia 10.9 6.7 1.8

St Vincent -14.1 -21.4 -1.8

Suriname -8.7 -15.6 -11.3

Trinidad and Tobago 14.9 -1.4 -21.8

Source: FSB

FOREIGN

CURRENCY

RESERVES

BELOW

BENCHMARK

LEVELBenchmark

3.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

BAH BAR BZE GUY JAM SUR TT ECCU

Mo

nth

s o

f Im

po

rts

2014 2015 2016

REGION

EXPECTED

TO GROW IN

2017

Source: CDB forecasts, IMF

3.13.4

1.41.1

2.2 2.3

3.2 3.2

2.7

3.5

2.32.1

1.7

3.5

0.7

2.5

-1.2

1.0

4.3

1.7

5.2

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2017 GDP Growth (%)

THANK

YOU