Caribbean News Now!

About Us Contact Us


Jump to your country or territory of interest

Advertise with us

Reach our daily visitors from around the Caribbean and throughout the world. Click here for rates and placements.


Submit news and opinion for publication


Click here to receive our daily regional news headlines by email.


Click here to browse our extensive archives going back to 2004

Also, for the convenience of our readers and the online community generally, we have reproduced the complete Caribbean Net News archives from 2004 to 2010 here.

Climate Change Watch

The Caribbean is especially vulnerable to rising sea levels brought about by global warming. Read the latest news and information here...

Follow Caribbean News Now on Twitter
Connect with Caribbean News Now on Linkedin

News from the Caribbean:

Back To Today's News

IMF concludes 2017 discussion on common policies of ECCU member countries
Published on June 16, 2017 Email To Friend    Print Version

WASHINGTON, USA -- On June 2, 2017, the executive board of the International Monetary Fund (IMF) concluded the 2017 discussion on the common policies of the Eastern Caribbean Currency Union (ECCU) in the context of the Article IV consultations with member countries.

Favorable external conditions continue to support economic recovery, 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.

Executive Board Assessment

Executive directors welcomed the favorable short-term outlook, supported by solid tourism inflows, low oil prices, and steady foreign direct investment. Directors noted that while risks are broadly balanced, the ECCU is vulnerable to external shocks, policy slippages, and natural disasters. With this background, directors recommended implementation of stronger policies and structural reforms to address vulnerabilities, enhance resilience, and improve growth prospects.

Directors underscored the need to place public debt on a path consistent with the 2030 regional benchmark of 60 percent of GDP, while a few directors called for a ceiling at this level. The adoption of credible fiscal frameworks, strengthened by fiscal responsibility legislation where appropriate, would help achieve the debt target. Directors stressed that sound management of the public sector wage bill is critical for fiscal consolidation. The decision by the Monetary Council of the central bank to discuss members’ medium-term frameworks and interim fiscal targets is a useful step, but determined implementation will be key.

Directors emphasized the need to prepare for natural disasters and build resilience, including through investment in infrastructure and ex-ante financing arrangements which are fully integrated in macroeconomic frameworks. Revenues from citizenship-by-investment (CBI) programs, which should be used to reduce public debt where necessary, can also be directed to saving funds and to finance appropriate investment plans. Directors suggested that a regional approach to CBI programs would help strengthen the integrity of these programs while reducing their costs.

While recognizing steps taken by the ECCB, directors noted that weaknesses remain in the financial sector, with banks still burdened by high nonperforming loans. They highlighted the importance of enforcing prudential requirements based on a realistic assessments of banks’ capital needs. Prompt activation of the Eastern Caribbean Asset Management Company would accelerate banks’ disposal of their bad assets. Directors also encouraged early completion of key legislation, including a harmonized law on asset quality, a stronger regulatory framework for credit unions and insurance companies, and new insolvency legislation.

Directors suggested that the cost of securing correspondent banking relationships can be reduced through stronger AML/CFT legislation and supervision, bank consolidation, and improved communication. They also noted that removing the saving rate floor would improve the functioning of credit markets. Efficiency enhancements in the Regional Government Securities Market would help lower borrowing costs and improve financial intermediation.

Directors stressed that accelerating structural reforms is necessary to address high unemployment, raise competitiveness, and boost growth prospects. Priorities include reducing costs of doing business and speeding up the implementation of renewable energy projects. Directors noted that furthering regional integration would help achieve economies of scale and enhance competitiveness. Strengthening the link between wages and productivity would help address structural unemployment.

Directors welcomed recent improvements in the quality of statistics and data provision, and encouraged further progress to enhance the quality of surveillance and policy analysis.
Reads: 17479

Click here to receive daily news headlines from Caribbean News Now!



No comments on this topic yet. Be the first one to submit a comment.


As a result of our comments feature being overtaken in recent weeks by spammers using fake email addresses, producing a large number of bounced verification emails each day, we have reluctantly decided to suspend the comments section until further notice.

User comments posted on this website are the sole views and opinions of the comment author and are not representative of Caribbean News Now or its staff. Caribbean News Now accepts no liability and will not be held accountable for user comments.
Caribbean News Now reserves the right to remove, edit or censor any comments. Any content that is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will not be approved.
Before posting, please refer to our Terms of Use and Privacy Policy.

Other Headlines:

Regional Sports: