Eastern Caribbean Currency Union: 2022 Article IV Consultation with Member Countries on Common Policies of the Eastern Caribbean Currency Union-Press Release; Staff Report; and Statement by the Executive Director for the Eastern Caribbean Currency Union
IMF Staff Country Reports, July 29, 2022
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- Eastern Caribbean Currency Union: 2022 Article IV Consultation with Member Countries on Common Policies of the Eastern Caribbean Currency Union-Press Release; Staff Report; and Statement by the Executive Director for the Eastern Caribbean Currency Union
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Bibliographic details
- Published: July 29, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400216794.002
Executive summary and macroeconomic context
- Publication date: July 29, 2022
- Key message: ECCU economies are slowly emerging from the pandemic with scars; the impact of the war in Ukraine represents a setback to the nascent recovery.
- Economic headwinds identified:
- Higher food and energy prices amid ongoing supply disruptions and intra-regional transportation bottlenecks.
- Consequences: raising inflation, eroding income, lowering output growth, worsening fiscal and external positions, and threatening food and energy security.
- Outlook: subject to large downside risks, primarily from:
- further increases in commodity prices;
- new coronavirus disease variants amid vaccine hesitancy;
- the ever-present threat of natural disasters.
Financial sector assessment
- Current stance: The financial system has remained broadly stable so far, with adequate capital and liquidity buffers.
- Key vulnerability: nonperforming loans remain high and could rise further following the expiration of the Eastern Caribbean Central Bank’s loan moratoria program.
Fiscal and social policy findings
- Fiscal pressures: higher commodity prices and weakened output are worsening fiscal positions across the union.
- Social impacts: rising living costs threaten vulnerable households and food and energy security.
Policy recommendations
- Maintain fiscal prudence while protecting the vulnerable through:
- health spending;
- temporary targeted transfers;
- enhanced social safety nets to cope with rising living costs.
- Adopt well-designed rule-based fiscal frameworks to:
- help achieve fiscal consolidation;
- enhance resilience to shocks such as natural disasters;
- preserve the credibility of the regional debt target.
Publication metadata and classification
- Pages: 91
- Volume: 2022
- Issue: 253
- Series: Country Report No. 2022/253
- DOI: https://doi.org/10.5089/9798400216794.002
- Stock No: 1ECCEA2022001
- ISBN: 9798400216794
- ISSN: 1934-7685
- Subject: Environment, Financial institutions, Fiscal policy, Health, International organization, Monetary policy, Public debt
- Keywords: Caribbean, Climate change, COVID-19, ECCU country, ECCU economy, ECCU member country, ECCU member states, ECCU region, Fiscal stance, Global, Loans, Natural disasters
International Monetary Fund. Western Hemisphere Dept. "Eastern Caribbean Currency Union: 2022 Article IV Consultation with Member Countries on Common Policies of the Eastern Caribbean Currency Union-Press Release; Staff Report; and Statement by the Executive Director for the Eastern Caribbean Currency Union", IMF Staff Country Reports 2022, 253 (2022).
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