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Caribbean Region Quarterly Bulletin -October 2015
Weak economic growth continues to challenge the tourism-dependent countries of the Caribbean. Commodity exporters are also facing subdued growth given the decline in international prices. Fiscal consolidation remains the major theme for the Caribbean region.
Summary Of Recent Developments, By Country
The Bahamas continues to suffer from uncertainty related to delayed completion of the BahaMar resort. As a result, the economy remains weak in spite of strong international demand for tourism.
Barbados’s long-stay tourism arrivals increased by 15 percent in the first nine months of 2015. The country’s fiscal position improved, but debt continues to trend upward. The lower international oil and commodity prices would be conducive to growth and keeping inflation stable at below 2 percent.
In Guyana, growth projections for 2015 are 3.4 percent, as Guyana’s main economic sectors face challenges. However, strong foreign direct investment flows and continued public investment in infrastructure are expected to maintain the favorable economic outlook.
Jamaica’s outlook continues to be positive as the International Monetary Fund’s Executive Board approved the tenth review of Jamaica’s Extended Fund Facility in December 2015. However, challenges remain, especially in accelerating economic growth to support economic adjustment and improving the livelihood of the population. In addition, crime has spiked, reversing the declining murder rate trend, with the year-to-date number of murders in October surpassing the number of murders for the whole of 2014.
Suriname’s macroeconomic performance continues to be constrained by falling commodity prices. However, reforms to reduce vulnerabilities have started, and new investments should support economic growth. In Trinidad and Tobago, fiscal and external risks remain, as depressed oil prices and uncertainty in global energy markets continue. As fiscal revenue continues to be a major concern, the recently presented budget proposes a stronger focus on non-energy revenues.
A tourism-led recovery is underway in the countries of the Eastern Caribbean Currency Union/Organisation of Eastern Caribbean States. Countries are undergoing fiscal consolidation but continue to be challenged by large fiscal deficits, high levels of public debt, and modest growth. Their growth outlook is positive in 2015. The significant damages and losses from Tropical Storm Erika in Dominica are a reminder of the vulnerability of Caribbean countries to adverse natural events.
Special Country Reports: Credit Ratings
In the Special Country Reports, we look at credit ratings in the Caribbean. In line with challenging economic developments, credit ratings have been under pressure in several Caribbean countries. Weak fiscal situations, structural current account deficits, and vulnerability to external shocks all have put pressure on the credit ratings. The individual country reports discuss rating histories and give an outlook of each credit rating’s likely development in the short to medium term.