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International Monetary Fund. Western Hemisphere Dept.
This paper presents IMF’s 2019 Discussion on Common Policies of Member Countries of the Eastern Caribbean Currency Union (ECCU). ECCU’s gross domestic product (GDP) growth accelerated from 3/4 percent in 2017 to 3 3/4 percent in 2018, reflecting buoyancy in the tourism sector, sizable Citizenship-by-Investment (CBI) inflows, and a recovery from the 2017 hurricanes in Anguilla and Dominica, which were supported by large public investments in reconstruction. Fiscal deficits increased in 2018–2019, but they have remained moderate. Efforts are needed to streamline, and re-balance tax incentives based on clear principles consistent with international best practices. External imbalances are sizable and significant financial sector vulnerabilities affect both banks and non-banks. Growth is projected to gradually moderate toward its long-term average of 2 1/4 percent as the cyclical momentum normalizes and CBI inflows ease. These trends would also contribute to wider fiscal deficits, ending the downward drift in public debt dynamics. The outlook is clouded by downside risks, including a possible intensification of natural disasters and financial sector weaknesses.
International Monetary Fund. Western Hemisphere Dept.
This 2018 discussion on common policies of the Eastern Caribbean Currency Union (ECCU) highlights that the member countries are gradually recovering following the catastrophic impact of Hurricanes Irma and Maria in 2017. Conditions remain favorable to growth, however, risks are increasing. The fiscal balance for the region as a whole worsened in 2017, reflecting lower inflows from citizenship-by-investment programs and higher reconstruction and current spending. The IMF team made several policy recommendations including shifting focus from the current emphasis on recovery from natural disasters to building ex-ante resilience. The report also recommends intensifying decisive and timely actions to resolve weaknesses in the financial sector, including longstanding problems in the banking sector and emerging risks in the non-banking sector. The authorities expressed commitment to the acceleration of key reforms to upgrade and strengthen the financial sector regional oversight framework. In addition to fiscal consolidation, injecting new vigor into the structural policy agenda will help enhance competitiveness and make growth more inclusive.
International Monetary Fund. Western Hemisphere Dept.
This 2018 Article IV Consultation highlights that the GDP growth in St. Lucia reached 3 percent in 2017, sustained by robust activity in several sectors. Favorable external conditions, coupled with hotel expansions and the addition of new flights, generated a strong recovery in tourism, with stay-over arrivals rising by 11 percent, the fastest growth in the Caribbean. Backed by strong tourism inflows, the current account balance strengthened. Unemployment declined from 21.3 percent in 2016 to 20.2 percent in 2017, but youth unemployment remains high at 38.5 percent and labor force participation has fallen. The short-term outlook is favorable, but prospects beyond that are sobering. GDP growth is expected to remain buoyant in the near term.
International Monetary Fund. Western Hemisphere Dept.
This paper discusses key points of 2017 Discussions on Common Policies of Member Countries of the Eastern Caribbean Currency Union (ECCU). Favorable external conditions continue to support economic recovery in the ECCU, but flat tourism receipts and falling revenues from citizenship programs have weakened growth. The fiscal position has deteriorated slightly, and public debt remains high. Despite progress on financial sector reform, bank lending continues to decline while indigenous banks’ profitability is adversely impacted by increasing costs to secure correspondent banking relationships. The short-term outlook is favorable and risks are broadly balanced, but strong structural policies are needed to address impediments to medium-term growth.
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights St. Lucia’s GDP growth, estimated to have reached 0.8 percent in 2016, down from 1.8 percent in 2015. Strong employment growth in agriculture and construction put a dent in unemployment, which declined to 20 percent in the third quarter of 2016. Youth unemployment also fell, but remains very high at 41 percent. GDP is projected to grow at 0.5 percent in 2017, driven mostly by continued strong performance in construction and agriculture. Higher import prices, including for oil, will cause inflation to rise temporarily and, together with weak tourism expenditures, will contribute to wider external imbalances.
International Monetary Fund. Western Hemisphere Dept.
This IMF Staff Report for the 2016 Discussion on Common Policies of Eastern Caribbean Currency Union (ECCU) Member Countries highlights that the regional recovery in ECCU is gaining ground, supported by continued low oil prices, strong tourism arrivals, and robust citizenship-by-investment receipts. Risks to the near-term outlook are balanced, but growth in the ECCU continues to be hindered by weak competitiveness, banking sector fragilities, susceptibility to natural disasters, and large public debt. The Executive Directors have encouraged the authorities to press ahead with sound macroeconomic policies and structural reforms to decisively address these issues and strengthen the conditions for robust long term growth.
International Monetary Fund. Western Hemisphere Dept.
A moderate economic recovery is taking hold in St. Lucia. Favorable international conditions have contributed to improved demand for tourism, St. Lucia’s main economic sector, and the external current account deficit has narrowed significantly. The authorities have made some progress in addressing a weak fiscal position. However, the financial sector continues to be impaired by nonperforming loans, public debt keeps rising, and unemployment remains very high, while external sector competitiveness continues to be weakened by an overvalued exchange rate, economies of scale disadvantages, and structural bottlenecks.
International Monetary Fund
This 2005 Article IV Consultation highlights that economic activity in the Eastern Caribbean Currency Union (ECCU) has accelerated since mid-2003 owing to an acceleration of activity in the tourism and construction sectors. Inflation has been stable and monetary aggregates have been expanding rapidly, reflecting continued growth in the demand for money and confidence in the banking system and the quasi-currency board arrangement. Against this background, Executive Directors have called for strengthening fiscal consolidation, lowering the debt ratios, and ensuring the consistency of fiscal policies with the currency board arrangement.