Economic Survey of the Caribbean 2014 Reduced Downside Risks and Better Prospects for a Recovery

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Economic Survey of the Caribbean 2014 Reduced Downside Risks and Better Prospects for a Recovery ISSN 1727-9917 eclac subregional studies and headquarters SERIES PERSPECTIves for the caribbean Economic survey of the Caribbean 2014 Reduced downside risks and better prospects for a recovery Dillon Alleyne Michael Hendrickson Sheldon McLean Michael Milligan Kohei Yoshida Machel Pantin Nyasha Skerrette 39 Economic survey of the Caribbean 2014 Reduced downside risks and better prospects for a recovery Dillon Alleyne Michael Hendrickson Sheldon McLean Michael Milligan Kohei Yoshida Machel Pantin Nyasha Skerrette This document has been prepared under the supervision of Dillon Alleyne, Coordinator of the Economic Development Unit, Economic Commission for Latin America and the Caribbean subregional headquarters for the Caribbean, with the assistance of Michael Hendrickson, Sheldon McLean, Michael Milligan and Kohei Yoshida, Economic Affairs Officers, and Machel Pantin and Nyasha Skerrette, Research Assistants. 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 1727-9917 LC/L.3917 LC/CAR/L.450 Copyright © United Nations, October 2014. All rights reserved. Printed at United Nations, Santiago, Chile. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and inform the United Nations of such reproduction. ECLAC – Studies and Perspectives Series – The Caribbean – No. 39 Economic survey of the Caribbean 2014 Contents Abstract...................................................................................................................................................... 5 Introduction ............................................................................................................................................... 7 I. Subregional analysis ....................................................................................................................... 9 A. The global economic situation and the Caribbean response .................................................... 9 1. Reduced downside risks and better prospects for a recovery ........................................... 9 2. Unemployment in developed countries .......................................................................... 12 B. GDP growth and unemployment in the Caribbean ................................................................ 12 C. Fiscal policy and public debt .................................................................................................. 15 1. Public debt...................................................................................................................... 19 2. Debt service payments ................................................................................................... 19 D. Monetary policy, domestic credit and inflation...................................................................... 20 E. Balance of payments .............................................................................................................. 24 1. Current account .............................................................................................................. 24 2. Financial and capital account ......................................................................................... 25 3. International reserves ..................................................................................................... 26 F. Outlook for 2014-2015 and recommendations ....................................................................... 27 II. Country briefs............................................................................................................................... 29 A. Bahamas ................................................................................................................................. 29 1. General trends ................................................................................................................ 29 2. Economic policy ............................................................................................................ 30 3. Trends in the principal variables .................................................................................... 31 B. Barbados................................................................................................................................. 32 1. General characteristics of recent trends ......................................................................... 32 2. Economic policies .......................................................................................................... 33 3. Trends of the principal variables .................................................................................... 34 C. Belize ..................................................................................................................................... 35 1. General characteristics of recent trends ......................................................................... 35 2. Economic policy ............................................................................................................ 36 3. Trends in the principal variables .................................................................................... 37 D. Eastern Caribbean Currency Union........................................................................................ 38 1. General trends ................................................................................................................ 38 2. Policy challenges ............................................................................................................ 39 3 ECLAC – Studies and Perspectives Series – The Caribbean – No. 39 Economic survey of the Caribbean 2014 3. The main variables ......................................................................................................... 40 E. Guyana ................................................................................................................................... 42 1. General characteristics of recent trends ......................................................................... 42 2. Economic policies .......................................................................................................... 43 3. Trends in the principal variables .................................................................................... 44 F. Jamaica ................................................................................................................................... 45 1. General characteristics of recent trends ......................................................................... 45 2. Economic policy ............................................................................................................ 45 3. Evolution of the main variables ..................................................................................... 48 G. Suriname ................................................................................................................................ 49 1. General characteristics ................................................................................................... 49 2. Economic policy ............................................................................................................ 50 3. Evolution of the main variables ..................................................................................... 52 H. Trinidad and Tobago .............................................................................................................. 52 1. General characteristics ................................................................................................... 52 2. Economic policy ............................................................................................................ 53 3. Trends in the principal variables .................................................................................... 54 Annexes .................................................................................................................................................... 57 Annex 1 Central government fiscal expenditure by categories ............................................................ 58 Annex 2 Debt service payment ratios for the Caribbean ...................................................................... 59 Studies and Perspectives series, The Caribbean: issues published ..................................................... 61 Tables TABLE 1 UNEMPLOYMENT RATES, 2010-2015......................................................................... 12 TABLE 2 CARIBBEAN: GDP GROWTH RATES, 2010-2015 ....................................................... 13 TABLE 3 CARIBBEAN: SECTORAL COMPOSITION, GROWTH RATES AND CONTRIBUTION, 2012 AND 2013 ....................................................................... 14 TABLE 4 FISCAL BALANCE ........................................................................................................ 16 TABLE 5 LENDING RATE, DEPOSIT RATE AND SPREAD, 2012-2013 ..................................... 21 TABLE 6 MONETARY AGGREGATES AND DOMESTIC CREDIT TO THE PRIVATE AND PUBLIC SECTOR, 2012-2013 ................................................ 22 TABLE 7 INFLATION RATES, 2010-2013 .................................................................................... 23 TABLE 8 CURRENT ACCOUNT BALANCE ...............................................................................
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