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MONTHLY NEWSLETTER

LATEST ISSUE

February, 2019
Caribbean Economic Report, February 2019
Venezuela's crisis: This is not about politics or oil - this is about people. Preliminary GDP growth for 2018: DomRep +7%; Cuba +1.2%; T&T +0.8%;

Caribbean Economic Report, December 2018
Bahamas Central Bank highlights importance of fiscal prudence in reducing pro-cyclicality, Barbados economy contracted 0.5% from Jan-Sept 2018, Cayman delivers fiscal surplus nearly double its

Caribbean Economic Report, October 2018
External public debt expands 31% y/y in Bahamas, Barbados targets 6% primary surplus under IMF program, Cayman economy expands 4.0% y/y in Q1 2018, Remittances

Caribbean Economic Report, August 2018
Rising international oil prices stoke inflation throughout the region and induced a rise in , Barbados economy contracted in H1 2018 by 0.6%, Cuba's economy

SPECIAL REPORTS

January 4, 2019
Contrary to what the Government would like us to believe, the T&T economy is in anything but a recovery and has NOT turned around. This

November 5, 2018
Marla reviews and analyzes recent development in the ECCU countries, offering insights into what is impacting growth, fiscal accounts, tourism, and projections for economic activity.

October 17, 2018
Marla reviews the most recent developments related to the announced closure of Petrotrin. This brief is a summary of information, data and statements related to

LATEST INSIGHTS

Negative impacts from the hurricanes persisted in 2018, with recovery in Dominica and Puerto Rico to be most evident in 2019. Fiscal and external weakness continue to affect many.

February 15, 2019
The region is becoming increasingly reliant on Travel and Tourism for employment and for overall economic activity.

Global growth projections were revised downwards by the IMF in its latest forecasts, to 3.7% in 2019. For advanced economies, the estimate for 2018 was revised down to 2.36% and growth is expected to slow further to 2.1% in 2019.

MAKING A DIFFERENCE

Follow the key policies and initiatives Marla is working on to set the Caribbean on a more sustainable economic trajectory.

FISCAL RULES

The Keynesian approach to economic management assumes that higher fiscal spending stimulates growth. But in T&T, instead of running fiscal surpluses and saving energy windfalls, we continue to spend more, at times even incurring fiscal deficits and borrowing to spend when energy revenues are high. When energy prices decline, we are left with insufficient fiscal space or capacity to borrow and compensate for the attendant shortfall in energy derived fiscal revenues. But there is something we can do relatively quickly, to dampen the pro-cyclicality of fiscal policy and make it more counter cyclical…

CARIBBEAN TRANSFORMATION

The Caribbean has come to a point where after some 50 years of independence for most of us, we are in a state of socio-economic decline. And unless we are in a balance of payments crisis, and can appeal for IMF intervention, there will be nobody coming to our rescue. Many of us are classified as middle / upper middle / high income which means we are treated in a manner that is not appropriate for developing countries by the World Bank and other development agencies, an atrocity in itself. We need to recognize that we have to cause fundamental shifts in the way we run our countries as a matter of urgency, lest we deteriorate…

FOREIGN DIRECT INVESTMENT

Because in the Caribbean we generally run fiscal deficits, this behaviour drives deficits on the current account of the balance of payments. The net outflow of USD as reflected in the current account deficit, is financed on the capital account of the balance of payments, usually via sovereign debt and by foreign direct investment. It is argued that in the region we do not benefit from FDI to the extent that we should, based on concessions granted, inadequate transfer of knowledge, etc. We propose an FDI-driven growth model which does not rely on concessions. Instead, the foreign investor pays the usual corporate tax rate, and instead of…

FINANCIAL INCLUSION

While financial inclusion itself is not a sustainable development goal, it underpins 8 of the 17 SDGS including reducing poverty, income inequality, and gender inequality, so much so that the World Bank has a goal of universal financial inclusion by 2020, which is even more aggressive a timeline than the SDGS. Due to ‘de-risking’, as a region, the Caribbean is becoming increasingly financially excluded on a national level. Poverty levels are already around 40%. According to the World Bank, around 2 billion people (40% of the world’s adults, 50% of the world’s poorest) are unbanked. Over one billion women worldwide are…

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