IMF Working Papers

Barbados: Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities

By Charles Amo Yartey

January 1, 2012

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Charles Amo Yartey. Barbados: Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities, (USA: International Monetary Fund, 2012) accessed December 12, 2024
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.

Subject: Economic sectors, Financial crises, Financial sector, Financial statements, Foreign currency exposure, Money, Public financial management (PFM), Public sector

Keywords: Aggregate balance sheet, Balance sheet information, Balance sheet matrices, Balance sheet weakness, Banking system, Barbados, Financial sector, Financial statements, Foreign currency assets, Foreign currency exposure, Foreign currency mismatch, Foreign currency position, Foreign currency position of the CBB, Foreign currency position of the sector, FX position, Global, Net effect, Net financial position, Net foreign currency position, Position of the CBB, Position of the public sector, Position of the sector, Public sector, WP

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2012/031

  • Stock No:

    WPIEA2012031

  • ISBN:

    9781463933166

  • ISSN:

    1018-5941