Economic Survey of the Caribbean 2020 Facing the Challenge of COVID-19

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Economic Survey of the Caribbean 2020 Facing the Challenge of COVID-19 ISSN 1728-5445 SERIES STUDIES AND PERSPECTIVES 99 ECLAC SUBREGIONAL HEADQUARTERS FOR THE CARIBBEAN Economic Survey of the Caribbean 2020 Facing the challenge of COVID-19 Dillon Alleyne Sheldon McLean Michael Hendrickson Hidenobu Tokuda Machel Pantin Nyasha Skerrette Keron Victor Thank you for your interest in this ECLAC publication ECLAC Publications Please register if you would like to receive information on our editorial products and activities. When you register, you may specify your particular areas of interest and you will gain access to our products in other formats. www.cepal.org/en/publications ublicaciones www.cepal.org/apps 99 Economic Survey of the Caribbean 2020 Facing the challenge of COVID-19 Dillon Alleyne Sheldon McLean Michael Hendrickson Hidenobu Tokuda Machel Pantin Nyasha Skerrette Keron Victor This document was prepared by Dillon Alleyne, Deputy Chief; Sheldon McLean, Coordinator of the Economic Development Unit; Michael Hendrickson, Economic Affairs Officer; Hidenobu Tokuda, Associate Economic Affairs Officer; Machel Pantin and Nyasha Skerrette, Economic Affairs Assistants; and Keron Victor, consultant with the Economic Commission for Latin America and the Caribbean (ECLAC) subregional headquarters for the Caribbean. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. United Nations publication ISSN: 1728-5445 (electronic version) ISSN: 1727-9917 (print version) LC/TS.2021/1 LC/CAR/TS.2021/1 Distribution: L Copyright © United Nations, 2021 All rights reserved Printed at United Nations, Santiago S.20-00888 This publication should be cited as: D. Alleyne and others, “Economic Survey of the Caribbean 2020: facing the challenge of COVID-19”, Studies and Perspectives series-ECLAC Subregional Headquarters for the Caribbean, No. 99 (LC/TS.2021/1- LC/CAR/TS.2021/1), Santiago, Economic Commission for Latin America and the Caribbean (ECLAC), 2021. Applications for authorization to reproduce this work in whole or in part should be sent to the Economic Commission for Latin America and the Caribbean (ECLAC), Documents and Publications Division, [email protected]. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and to inform ECLAC of such reproduction. ECLAC - Studies and Perspectives series-The Caribbean No. 99 Economic Survey of the Caribbean... 3 Contents Abstract ................................................................................................................................................ 5 I. Global and subregional performance ........................................................................................ 7 A. Global analysis and performance ......................................................................................... 7 B. Caribbean growth performance and prospects ....................................................................8 C. Unemployment ................................................................................................................. 10 II. Fiscal and debt performance ................................................................................................... 11 A. Fiscal ................................................................................................................................. 11 B. Debt .................................................................................................................................. 12 C. Debt Service Payments ..................................................................................................... 13 III. Monetary Policy ....................................................................................................................... 15 A. Interest Rates .................................................................................................................... 15 B. Money supply and credit ................................................................................................... 17 C. Inflation ............................................................................................................................. 18 IV. External sector developments ................................................................................................ 21 A. Tourism arrivals ................................................................................................................. 21 B. Current account ................................................................................................................ 23 C. Foreign direct investment ................................................................................................. 24 V. COVID-19 focus ........................................................................................................................ 27 A. Lockdown measures .......................................................................................................... 27 B. Tourism impacts ................................................................................................................ 28 C. Energy impacts ................................................................................................................. 30 VI. Conclusion................................................................................................................................ 33 Bibliography ....................................................................................................................................... 35 ECLAC - Studies and Perspectives series-The Caribbean No. 99 Economic Survey of the Caribbean... 4 Annex ................................................................................................................................................. 37 Annex 1 .......................................................................................................................................... 38 Studies and Perspectives-The Caribbean Series: issues published. ...................................................... 71 Tables Table 1 Global economic performance and prospects, 2018-2020 ...........................................8 Table 2 Caribbean GDP growth rates, 2019-2020 .................................................................... 9 Table 3 Fiscal balances 2014- 2019 ........................................................................................ 12 Table 4 Debt service payment ratios for the Caribbean .......................................................... 14 Table 5 Monetary aggregates and domestic credit to the private and public sector, 2018-2019 ..................................................................................... 17 Table 6 Summary of the COVID-19 impact on the energy sector ........................................... 31 Figures Figure 1 Unemployment rates, 2014-2019 .............................................................................. 10 Figure 2 Total public debt, 2019 ............................................................................................. 13 Figure 3 Lending rate and deposit rate 2019 ........................................................................... 16 Figure 4 Caribbean Inflation rates , 2014-2019 ........................................................................ 19 Figure 5 Year-on-year growth in tourism stay-over arrivals, 2019-2020................................... 22 Figure 6 Year-on-year growth in cruise ship arrivals, 2019-2020 .............................................. 22 Figure 7 Current account balance, 2019 .................................................................................. 24 Figure 8 Foreign Direct Investment, 2019 ................................................................................ 25 Figure 9 Government response stringency index in the Caribbean, 13 March to 30 September 2020 ................................................................................ 28 Figure 10 Loss of direct GDP growth .........................................................................................29 Figure 11 Stayover and cruise tourism expenditure losses by economy, 2020 ........................... 30 ECLAC - Studies and Perspectives series-The Caribbean No. 99 Economic Survey of the Caribbean... 5 Abstract This survey examines the economic performance of economies of the Caribbean in 2019 and the first half of 2020 and comprises six chapters. The first chapter gives an overview of global, regional and subregional economic performance in the Caribbean. The second provides an analysis of the subregion’s fiscal performance and debt burden. The third looks at monetary policy and their imapcts. The fourth is focused on the external sector. The fifth chapter focuses on the COVID-19 lockdown measures implemented globally as well as in Caribbean countries and their impact on the tourism and energy sectors, while the sixth chapter concludes. The annex includes individual country briefs which give an overview of the economic situation for the Bahamas, Barbados, Belize, Guyana, Jamaica, Suriname, Trinidad and Tobago and a subregional assessment of the countries of the Eastern Caribbean Currency Union. ECLAC - Studies and Perspectives series-The Caribbean No. 99 Economic Survey of the Caribbean... 7 I. Global and subregional performance A. Global analysis and performance In 2019 global economic growth was 2.9% (see table 1) and it represented
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