This presentation was delivered by Daniel Best, Director, Projects Department. The event took place on February 7, 2018, in Barbados, at the CDB Headquarters. For more information about the Caribbean Development Bank’s work, visit www.caribank.org.

1. CARIBBEAN ECONOMIC
REVIEW AND OUTLOOK
Dr. Justin Ram
Director of Economics
Caribbean Development Bank
Conference Centre
February 7, 2018

2. Agenda
01 The global picture
02 Caribbean economic review and outlook
03 Framework for a more resilient caribbean

3. The
global
picture

4. Global outlook is more positive with the LAC region
improving, but still lagging behind
3.2
1.7
4.4
-0.7
3.7
2.3
4.7
1.3
3.9
2.3
4.9
1.9
World Advanced economies Emerging market and
developing economies
Latin America and The
Caribbean
2016 2017 2018
Real GDP Growth (%), 2016 – 2018
Source: IMF WEO Update January 2018

5. Risks and opportunities
RISKS
• Continued uncertainty in U.S.
Policy
• Weakening U.S. Dollar
• Geopolitical risks
• BREXIT
• China rebalancing
• Global tightening
• Non-inclusive growth
• Natural disasters and extreme
weather
OPPORTUNITIES
• Rising commodity prices
• U.S. fiscal stimulus
• Continued China stimulus
• Rapid advancement of AI
• Strengthening pound
• Recovery in Brazil and Latin
America

6. Caribbean
economic
review and
outlook

7. Last year’s growth rates ranged from -6.9% to 4.5%
-6.9%
-3.5%
-2.7%
-1.2% -1.0%
0.0%
0.5%
1.0% 1.0% 1.2%
1.6% 1.7%
2.7% 2.8% 2.9% 2.9% 3.0%
3.4%
4.5%
DOM ANG BVI SUR TT SVG BZE BAH BAR HAI MON JAM CAY SKN GUY SLU ANT TCI GRE
BMC Average = 0.6%
Source: IMF WEO, Central Banks, CDB
Estimated 2017 GDP Growth %

8. Average BMC growth is consistently lower than other
small and developing states
World
Other Small Developing
States
Advanced economies
Emerging market and
developing economies
CDB Borrowing Member
Countries
-4
-2
0
2
4
6
8
2009 2010 2011 2012 2013 2014 2015 2016 2017
Real GDP Growth (%), 2009 – 2017
Source: IMF, WEO, CDB

9. Commodity prices still relatively low & visitors arrivals
have recovered
50
60
70
80
90
100
110
120
Gold Index
Jan 2014 - Dec 2017
0
20
40
60
80
100
120
Crude Oil (US$/bbl)
Jan 2014 – Dec 2017
2015 2016 2017
+3.7%
1.4% +1%
Sources: IMF, CTO
Visitor Arrivals

10. Many BMCs have had double-digit rates of
unemployment for more than a decade
4.3
5
9.1
9.4
10
10.2
10.4
13.9
14.1
20
24
25
CAY
TT
SUR
BEL
BAH
BAR
JAM
DOM
ANT (2015)
SLU
GRE
SVG (2015)
Unemployment Rate (%)
2017 estimate unless otherwise noted
Sources: IMF, Statistical Offices, CDB

11. 119 positive reforms
(2016-2018)
11 negative reforms
(2016-2018)
Regional rankings:
World Bank Doing Business Reports 2016-2018
1
51
101
151
1. Ease of
Doing
Business
Rank
2. Starting a
Business
3. Dealing
with
Constructio
n Permits
4. Getting
Electricity
5.
Registering
Property
6. Getting
Credit
7. Protecting
Investors
8. Paying
Taxes
9. Trading
Across
Borders
10.
Enforcing
Contracts
11.
Resolving
Insolvency
2017/2018 2016/2017 2015/2016
Most Reforms:
Jamaica (11)
Best Performer:
Jamaica (70th)
Source: World Bank

12. Regional debt levels are still unsustainably high
2016 2017
Change
in %
BAR 161.5 157.1 -4.4
JAM 119.4 113.4 -6.0
BZE 92.3 93.9 +1.6
ANT 82.5 78.3 -4.2
SVG 82.1 77.2 -4.9
DOM 72.7 72.7 --
BAH 68.0 72.7 +4.7
SLU 66.7 67.0 +0.3
GRE 76.3 66.3 -10.0
SKN 64.8 64.6 -0.2
2016 2017
Change
in %
SUR 68.8 63.2 -5.6
TT 58.8 60.1 +1.3
ANG 60.6 56.8 -3.7
GUY 45.7 45.2 -0.5
HAI 33.7 32.6 -1.1
BVI 18.8 18.7 -0.1
CAY 16.3 14.7 -1.6
TCI 7.6 7.4 -0.2
MON 5.1 6.1 +1.0
Source: Central Banks

13. Some foreign currency reserves are below the global
benchmark
1.7 2.4
3.0
3.6
3.6
4.4
5.0
5.1
5.85.9
7.8
8.5
9.0
3.0
5.9
5.9
11.3
0
2
4
6
8
10
12 Barbados
The Bahamas
Suriname
Guyana
Antigua and Barbuda
Belize
Saint Lucia
Grenada
JamaicaHaiti
St. Kitts & Nevis
Dominica
Trinidad and Tobago
Dominican Republic
Venezuela
Pacific Island Small
States
LAC
2017 Latest Available
As at end of 2016
Source: Central Banks

14. CDB estimates that the region will grow at 2% in 2018
0.7%
1.0% 1.2%
1.8% 2.0% 2.0% 2.0%
2.3% 2.4%
3.0% 3.1% 3.2% 3.2% 3.3%
3.5%
4.4%
5.3%
6.4%
7.0%
1.0%
-1.0% -1.2%
0.5%
0.0%
1.0%
1.6% 1.7% 1.2%
-2.7%
2.9% 2.8% 2.7% 2.9%
4.5%
3.4% 3.0%
-6.9%
-3.5%
BAR TT SUR BZE SVG BAH MON JAM HAI BVI SLU SKN CAY GUY GRE TCI ANT DOM ANG
2018 Forecast 2017 Estimate
BMC average = 2%
Source: CDB

15. A framework
for a more
resilient
Caribbean

16. Regional Challenges
Low growth
average 0.4% over a decade
High debt
regional median 65% of GDP
Low commodity prices and
declining reserves
Jamaica is the 70th country in the WB
Ease of Doing Business Index– highest
BMC
Large infrastructure gaps
Weak governance
Inefficient and costly transport links and
high energy costs
High poverty (43.7%) and youth
unemployment (18-47%)
Poor education outcomes, skills
mismatch and brain drain
High crime and citizen insecurity
High annual natural disaster costs
Low insurance payouts
Insufficient building codes
Poor climate change adaptation
tools
Macroeconomic
Low Productivity &
Competitiveness
Poor Human Development Environmental Threats

17. A Caribbean blueprint
Sustainable
Society
Macroeconomic
Economic growth and diversification
Fiscal rules, e.g., Debt-to-GDP limits
Strong / resilient financial sector
Good quality education for all
Workforce skills training based on
employers’ needs
Conditional cash transfers to the most
vulnerable
Human Development
Productivity & Competitiveness
Environmental Preparedness
Private sector-led growth
First class and cost-
effective infrastructure
Regional payments facility (Fintech)
Opening new trade markets
CCRIF, indemnity insurance, resiliency funds
Environmental tools
Strict building code compliance
Climate change adaptation tools
Microcredit for recovery lending
Regional Integration Gender Equality

18. Thank you