{
  "title": "Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union",
  "publication": "IMF Working Papers, August 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/index.md",
  "summary": "The fiscal position of the Eastern Caribbean Currency Union (ECCU) has deteriorated significantly in recent years, resulting in sharp increases in public debt.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- The fiscal position of the Eastern Caribbean Currency Union (ECCU) has deteriorated significantly in recent years, resulting in sharp increases in public debt.\n- The paper examines the sustainability of public debt using the public sector budget constraint to derive the maximum public-debt-to-GDP ratio that can be sustained based on a country's projected steady-state primary balance, interest rate on public debt, and economic growth rate.\n- In this context, government deficits and debt in several ECCU member countries appear unsustainable, posing a risk to the stability of the currency union.\n- A critical issue facing member countries is to implement fiscal policies consistent with sustainable public finances and debt to underpin the currency union."
    },
    {
      "heading": "Methodology",
      "content": "- Fiscal sustainability is assessed using the public sector budget constraint framework.\n- The maximum sustainable public-debt-to-GDP ratio is derived from three projected steady-state parameters:\n  - steady-state primary balance,\n  - interest rate on public debt,\n  - economic growth rate."
    },
    {
      "heading": "Main Findings",
      "content": "- The ECCU’s fiscal position has deteriorated significantly, leading to sharp increases in public debt.\n- Based on the public sector budget constraint analysis, government deficits and debt in several ECCU member countries appear unsustainable.\n- Unsustainable public finances pose a risk to the stability of the currency union."
    },
    {
      "heading": "Policy Recommendations",
      "content": "- Implement fiscal policies consistent with sustainable public finances and debt to support the stability of the currency union.\n- Strengthen measures in areas implied by the subject taxonomy (economic integration, fiscal policy, fiscal stance, government debt management, monetary unions, public financial management).\n\n---\n\n Content in this bundle\n\n- Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union - WP/03/162\n  - Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union - WP/03/162 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union - WP/03/162 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/bundle-manifest.json)",
    "Authors: Anthony J. Pellechio, Saqib Rizavi, Phebby Kufa",
    "Published: August 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451857894.001",
    "The fiscal position of the Eastern Caribbean Currency Union (ECCU) has deteriorated significantly in recent years, resulting in sharp increases in public debt.",
    "The paper examines the sustainability of public debt using the public sector budget constraint to derive the maximum public-debt-to-GDP ratio that can be sustained based on a country's projected steady-state primary balance, interest rate on public debt, and economic growth rate.",
    "In this context, government deficits and debt in several ECCU member countries appear unsustainable, posing a risk to the stability of the currency union.",
    "A critical issue facing member countries is to implement fiscal policies consistent with sustainable public finances and debt to underpin the currency union.",
    "Fiscal sustainability is assessed using the public sector budget constraint framework.",
    "The maximum sustainable public-debt-to-GDP ratio is derived from three projected steady-state parameters:",
    "The ECCU’s fiscal position has deteriorated significantly, leading to sharp increases in public debt.",
    "Based on the public sector budget constraint analysis, government deficits and debt in several ECCU member countries appear unsustainable.",
    "Unsustainable public finances pose a risk to the stability of the currency union.",
    "Implement fiscal policies consistent with sustainable public finances and debt to support the stability of the currency union.",
    "Strengthen measures in areas implied by the subject taxonomy (economic integration, fiscal policy, fiscal stance, government debt management, monetary unions, public financial management).",
    "**Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union - WP/03/162**"
  ],
  "related": [
    {
      "title": "Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union - WP/03/162",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03162.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03162.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03162.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/fiscal-sustainability-and-policy-issues-in-the-eastern-caribbean-currency-union-16603/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T06:24:12.120Z"
}