Barbados: Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities

 
Author/Editor: Yartey, Charles Amo
 
Publication Date: January 01, 2012
 
Electronic Access: Free Full text (PDF file size is 1,066KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
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: This paper uses the balance sheet approach to analyze macroeconomic vulnerabilities in Barbados between 2006 and 2009. It discusses the financial position of the economy and its main sectors and the sectors’ exposure to changes in exchange rates. The main finding of the analysis is that the balance sheet of the aggregate economy has been weakened by the recent deterioration in the balance sheet of the nonfinancial public sector. Macroeconomic vulnerabilities have increased in Barbados since 2006 due to the high public debt and the deterioration in the net financial position with nonresidents. The private sector, however, maintained a healthy position and seems resilient to shocks. The paper also finds the balance sheet of the nonfinancial public sector has deteriorated significantly reflecting weak fiscal performance. While the central government is highly vulnerable to exchange rate shock, debt rollover risks are likely to be limited since most of external liabilities are long term and most domestic liabilities are held by the National Insurance System.
 
Series: Working Paper No. 12/31
Subject(s): Budget deficits | Capital inflows | Corporate sector | Economic growth | External sector | Financial sector | Fiscal policy | Private sector | Public sector | Tourism | Barbados

Author's Keyword(s): Barbados: Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities
 
English
Publication Date: January 01, 2012
Format: Paper
Stock No: WPIEA2012031 Pages: 28
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org