Chapter 2. Fiscal Performance in the Caribbean Before and After the Global Financial Crisis
Author:
Alexandra Peter
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Language:
English
Print Publication Date:
06 May 2014
Keywords:
BOOK; spending multiplier; debt restructuring; debt accumulation; debt level; debt buildup; commodity exporter; government debt; interest payment; Fiscal stance; Interest payments; Caribbean; Global

Abstract

The Caribbean has a track record of high fiscal deficits, partly reflecting procyclical fiscal policies in good times. This has resulted in elevated levels of public-debt-to-GDP ratios since 1990. The predominant source of the budget imbalance is the central governments, even though public enterprises have also contributed significantly to the debt buildup. The debt accumulation stems from countercyclical fiscal policy in bad times and procyclical fiscal policy during periods of economic boom. The net result is that debt which has accumulated during periods of weak growth is not offset in good times, resulting in higher levels of debt in the medium term (Egert, 2011).

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Cover Caribbean Renewal
Caribbean Renewal
Tackling Fiscal and Debt Challenges
ISBN:
9781484369142
Publication Date:
06 May 2014
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781484369142.071
Pages:
314