Stabilization, Debt, and Fiscal Policy in the Caribbean

February 1, 2005

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Ratna Sahay. Stabilization, Debt, and Fiscal Policy in the Caribbean, (USA: International Monetary Fund, 2005) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Although Caribbean countries have been largely successful in bringing annual inflation down to single digits in recent years-regardless of their exchange rate regime-their growth rates have been disappointing and their public debt has risen rapidly. By 2003, 14 of 15 Caribbean countries ranked in the top 30 of the world's highly indebted emerging market countries. Most of the increase in their public debt is accounted for by a deterioration in primary fiscal balances that has been largely due to a sharp increase in expenditures rather than a fall in revenues. With the countries of the region now increasingly facing unsustainable debt positions, innovative ways need to be found to raise their economic growth rates and generate fiscal savings to reverse the debt buildup, and to maintain or raise their current living standards.

Subject: Conventional peg, Exchange rate arrangements, Fiscal stance, Natural disasters, Public debt

Keywords: Caribbean country, Country authorities, Exchange rate regime, Government expenditure, Policy stance, Real GDP, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/026
Stock No:

WPIEA2005026
ISBN:

9781451860450
ISSN:

1018-5941

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