Cgf nita thacker 10 30pm to 12-30pm june 17 2012

269 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
269
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Story is not about volatility.....
  • Relative performance of the Caribbean has declined sharply, particularly since the early 1990s.Jamaica has lost ground within and outside the region. Much of this decline reflects lower productivity....
  • Countries with higher debt levels have recovered more slowly.High debt with constrain fiscal policy. Countries in Caribbean will need to ensure real spending grows by less than GDP. The case of Trinidad is different. Spending declines reflects lower oil receipts (fiscal year 2009) and temporary execution delays.
  • Cgf nita thacker 10 30pm to 12-30pm june 17 2012

    1. 1. Nita Thacker Presentation for the Caribbean Growth Forum June 18, 2012 Western Hemisphere Department International Monetary Fund
    2. 2.  What is the current picture of debt in the Caribbean?  What has led to the accumulation of debt stocks?  What has helped sustain high debt stocks over time?  What is the effect of high debt (i.e., on growth)?  What can be done?
    3. 3. GDP Growth and Volatility (Based on real GDP growth rates 1971-2011) Average Countries Growth Caribbean 3.3 ECCU 4.1 Non ECCU Caribbean 2.6 Commodity Exporters 1/ 2.3 Other Caribbean 2/ 2.9 Tourism intensive Caribbean 3/ 3.6 Emerging Markets 3.9 Latin America 3.5 Non Caribbean Small Islands 3.3 Average Std. Dev. 4.6 4.4 4.7 5.3 4.3 4.4 5.7 4.3 5.1 Sources: World Economic Outlook; and IMF staff calculations. 1/ Trinidad and Tobago, Guyana and Suriname. 2/ The Bahamas, Barbados, Jamaica and Belize. 3/ Antigua and Barbuda, Bahamas, Barbados, Grenada, St. Kitts and Nevis, St. Lucia.
    4. 4. Caribbean: Per capita GDP (PPP) Relative to Relevant Comparators, 1970–2009 Other Caribbean ³ Commodity Exporters ² ECCU ¹ 1.1 3.0 1.6 1.4 0.9 Ratio to Caribbean (noncommodity exporters) (left scale) Ratio to Latin America (left scale) Ratio to emerging and developing 2.5 5.0 1.6 4.8 4.5 4.3 1.4 4.0 3.8 1.2 0.7 0.5 Ratio to Caribbean (non-ECCU) (left scale) Ratio to emerging and developing 3.5 3.0 1.0 0.8 1.5 1970 1975 1980 1985 1990 1995 2000 2005 3.3 1.0 2.0 Ratio to small islands 0.3 1.2 2.5 0.6 2.0 1970 1975 1980 1985 1990 1995 2000 2005 Source: IMF staff calculations. ¹ Includes Antigua & Barbuda, Dominica, Grenada, St. Kitts &Nevis, St. Lucia, and St. Vincent & the Grenadines. ² Includes Guyana, Suriname, and Trinidad & Tobago. ³ Includes the Bahamas, Barbados, Belize, and Jamaica. Ratio to Caribbean (nonother) (left scale) Ratio to emerging and developing Ratio to small islands 0.8 2.8 2.3 1.8 1970 1975 1980 1985 1990 1995 2000 2005
    5. 5. 0 St. Kitts and Nevis Jamaica Lebanon Barbados Grenada Seychelles Belize Egypt Antigua and Barbuda St. Lucia St. Vincent and… Dominica Jordan Brazil Guyana Poland Morocco Uruguay Malaysia Mauritius Bahamas, The Argentina Mexico Tunisia Philippines Turkey Panama Latvia Trinidad and Tobago Costa Rica Dominican Republic Suriname Public Sector Debt in Selected Countries, end-2011 (In percent of GDP) 180 160 140 120 100 80 60 Average 1/ 40 20 Sources: IMF, WEO; and IMF staff calculations. 1/ Average of Emerging Markets and Developing Economies.
    6. 6. Caribbean: Debt to GDP Change, 2009-11 (In percent of GDP) 15 10 5 0 -5 -10 -15 Includes impact of debt restructuring operations Sources: IMF, WEO; and IMF staff calculations.
    7. 7. ECCU: Contributions to Changes in Public Debt Other Caribbean: Contributions to Changes in Public Debt (In percent of GDP) (Sub title - Segoe UI - Size 18) 14 12 10 8 1991-97 avg 2005-08 avg 2010 8 1998-04 avg 2009 2011 1998-04 avg 2009 2011 6 4 6 2 4 0 2 2005-08 avg 2010 -2 0 -4 -2 -6 -4 -6 -8 Real GDP Primary balance (ex. grant) Grants Interest Price effect Other factors Total increase Sources: Country authorities; and IMF staff estimates. In the ECCU, large fiscal deficits and interest bills have contributed to debt accumulation, magnified by off-balance sheet events. Real GDP Primary balance (ex. grant) Grants Interest Price effect Other factors Total increase Sources: Country authorities; and IMF staff estimates. In the rest of the Caribbean, the impact of heavy interest bills dominates as a key contributor, followed by that of ad-hoc events...
    8. 8. Total and Domestic Public Debt Share of domestic debt to total (2010) 100 90 80 TTO BHS BRB 70 60 KNA ATG SUR JAM 50 LCA 40 VCT GUY 30 DMA GRD 20 BLZ 10 0 0 50 100 150 Total public debt to GDP (2010) Most often, domestic debt concentrates on securities, with some countries relying heavily on loans and overdrafts. 200
    9. 9. Public Debt Burden and Real GDP Growth Average real GDP growth, 2009-11 6 SUR 4 GUY 2 LCA 0 TTO -2 BLZ DMA BRB BHS JAM GRD VCT KNA -4 -6 ATG -8 0 20 40 60 80 100 Public Debt 2008 (percent of GDP) 120 Sources: World Economic Outlook; and IMF staff calculations. 140
    10. 10. Stylized Shape of the Threshold Effects of Public Debt on Growth Contribution of debt to annual output growth (in percent) 1 Caribbean Indicative Target (60%) 0.6 0.2 Debt (percent of GDP) 0 -0.2 -0.6 -1 20 30 40 60 80 100 120
    11. 11. Debt Service Ratios (percent of revenues) 50 45 Debt (% of GDP) 0% - 60% Debt (% of GDP) 61% - 90% 100 Debt (% of GDP) Above 90% 90 40 80 35 70 30 25 Interest Payments, 2011 Total Debt Service, 2011 (right) 60 50 20 40 15 30 10 20 5 10 0 0 SUR TTO BHS GUY DMA VCT LCA BLZ ATG GRD BRB JAM KNA
    12. 12. Total Public Sector Debt (percent of GDP) 160 t (before DS) t (after DS) Debt Service (percent of GDP) Average 3 years after DS (actual) 2011 40 t (before DS) 140 35 120 30 100 25 80 20 60 15 40 10 20 5 t (after DS) Average 3 years after DS (actual) 2011 0 0 DMA (2004) GRD (2005) BLZ (2007) ATG (2009) JAM (2010) 1/ Debt ratios for Antigua and Jamaica include projections. For comparison reasons with the old debt ratios, 2011 debt ratios for Dominica and Grenada use an estimation of the non-rebased nominal GDP. DMA (2004) GRD (2005) BLZ (2007) ATG (2009) JAM (2010) 1/ For Antigua and Jamaica debt service includes projections and t (before DS) refers to the year before debt restructuring.
    13. 13. Real GDP growth has tended to be higher in periods of declining Real per Capita GDP Growth During debt Periods of Rising and Falling Debt, 1970–2007 6 6 5.3 Per capita GDP growth (Percent) 5 4 3 5 Falling debt Rising debt 3.2 3.2 3.2 2.7 3 2.0 1.5 2 4 1.6 0.8 1 1.1 2 1 World Emerging & Developing Advanced Economies Caribbean (Non ECCU) 0 ECCU 0
    14. 14. Caribbean: Effect of Debt on Growth ¹ (Percent) 0.6 Growth if debt at 60 percent of GDP Growth if debt at emerging and developing countries level 0.6 0.4 0.4 0.2 0.2 0 0 -0.2 -0.2 -0.4 -0.4 ECCU Commodity exporters Other Caribbean Source: IMF staff calculations. ¹ Assumes 2009 debt-to-GDP levels drop (or increase) to 60 percent or 44.9 percent of GDP.
    15. 15.   Fiscal consolidation Debt restructuring ◦ Lengthen maturity and lower interest cost ◦ Debt-equity swaps ◦ Debt-land swaps  Private sector led growth

    ×