Vulnerability, Debt and Growth in the Caribbean: A Fan Chart Approach

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Peer Reviewed icon Peer Reviewed
Date issued
Sep 2013
Subject
Fiscal Policy;
Public Debt
JEL code
E62 - Fiscal Policy;
H60 - National Budget, Deficit, and Debt: General;
H63 - Debt • Debt Management • Sovereign Debt;
O54 - Latin America • Caribbean
Country
Trinidad and Tobago;
Barbados;
Suriname;
Bahamas;
Jamaica
Category
Technical Notes
High government debts, weak economic growth, vulnerability to external shocks and the design of sound fiscal consolidation strategies are among the most critical issues that some of the Caribbean countries have currently to deal with. Stabilization programs may harm economic growth but, under certain conditions, they could be expansionary. The main result of this analysis is that the uncertainty about the future evolution of debt increases when the volatility of exogenous shocks that affect fiscal revenues are properly accounted for in the debt sustainability analysis.