Chapter

VI. Caribbean Economic Outlook and Integration Issues

Author(s):
International Monetary Fund. Western Hemisphere Dept.
Published Date:
November 2007
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Recent Developments and Economic Outlook

Caribbean growth performance has been robust and the outlook remains favorable. Last year, regional GDP expanded by 5½ percent—the fastest pace in over two decades.21 Strengthened policy frameworks and a favorable external environment have underpinned the recovery since 2001, when tourism receipts declined sharply in the wake of the events of September 11. Looking ahead, growth is expected to slow moderately, reflecting the ending of Cricket World Cup (CWC)-related activity and a return to trend for tourism earnings after 2006, when visitors were diverted to the Caribbean from hurricane-affected Mexican destinations. With the external outlook still broadly favorable, Caribbean growth is, nonetheless, expected to remain above historical norms, with regional GDP expanding by about 4 percent in 2007 and 2008.

Strengthened macroeconomic policies have helped contain inflation. Countries in the region have generally been successful at limiting the inflationary impact of natural disaster–related food supply shocks and higher petroleum import prices. Skillful conduct of monetary policy in Jamaica has led to a reduction in consumer price inflation from 19 percent in September 2005 to under 6 percent by end-2006. Similarly, inflation in the Dominican Republic, which accelerated sharply in the wake of the banking crisis in 2002–03, was reversed once the authorities regained control over monetary aggregates. Inflation has, however, remained an issue in Trinidad and Tobago, where the positive terms of trade shock and rapid growth of public investment have led to the emergence of capacity constraints. On balance, average inflation in the Caribbean is projected to accelerate slightly to 5 percent in 2007 and decline further over the medium term.

Real GDP Growth

(Annual percent change)

Source: WEO.

1/ Unweighted average.

Output Growth(In percent; annual rate)
1995-2004 Avg.200520062007 Proj.2008 Proj.
The Caribbean 1/4.26.58.46.04.4
The Bahamas3.32.53.43.14.0
Barbados2.24.13.94.22.7
Dominican Republic5.29.310.78.04.5
ECCU economies 1/2.75.55.83.63.9
Guyana2.4-1.95.15.64.6
Haiti1.50.42.23.24.3
Jamaica0.51.42.51.42.0
Trinidad & Tobago7.78.012.06.05.8
Source: WEO.

PPP-weighted average.

Source: WEO.

PPP-weighted average.

Countries in the region took advantage of the economic expansion early on to strengthen fiscal balances. On average, deficits improved by 4 percentage points of GDP during 2002–05 owing to a variety of policy initiatives. For example, Dominica overhauled the tax system and cut the wage bill after its economic crisis in 2002–03, while Jamaica adopted its own ambitious program of fiscal consolidation under which a range of revenue and expenditure measures were implemented during 2003–04. Several Caribbean countries also embarked on tax reforms, such as the introduction of a VAT, which has helped strengthen revenue collections (Antigua and Barbuda, Dominica, Guyana, and St. Vincent and the Grenadines). Moreover, budgets have weathered adverse developments more successfully in recent years because of reforms to enhance fiscal flexibility, such as mechanisms to keep domestic petroleum prices more closely aligned with import costs. More recently, however, fiscal efforts have waned in some instances. Jamaica’s primary surplus declined in 2006 and deficits widened in the countries of the Eastern Caribbean Currency Union (ECCU).

Inflation

(In percent; end of period rate) 1/

1995-2004 Avg.200520062007 Proj.
The Caribbean 2/11.08.36.16.5
The Bahamas1.71.22.32.6
Barbados2.57.45.64.9
Dominican Republic13.07.45.06.0
ECCU economies 2/2.04.42.23.4
Guyana5.48.34.28.0
Haiti17.114.812.48.0
Jamaica11.512.95.88.9
Trinidad & Tobago4.27.29.18.0
Sources: WEO; and IMF staff estimates.

End-of-period rates, i.e. December on December. These will generally differ from period average inflation rates quoted in the World Economic Outlook, although both are based on identical underlying projections.

PPP-weighted average.

Sources: WEO; and IMF staff estimates.

End-of-period rates, i.e. December on December. These will generally differ from period average inflation rates quoted in the World Economic Outlook, although both are based on identical underlying projections.

PPP-weighted average.

Inflation

(Percent; annual end-of-period)

Source: WEO.

1/ Unweighted average.

Public Sector Balance

(In percent of GDP)

Sources: WEO; and IMF staff estimates.

External Current Account(In percent of GDP)
1995-2004 Avg.200520062007 Proj.2008 Proj.
The Caribbean 1/-3.4-0.3-0.4-1.0-0.6
The Bahamas-10.1-14.3-25.4-21.1-16.5
Barbados-4.0-12.5-8.4-8.6-8.5
Dominican Republic-0.9-1.4-3.2-3.4-2.3
ECCU economies 1/-15.9-19.8-24.9-22.0-20.6
Guyana-11.9-15.5-17.5-19.7-17.0
Haiti-1.11.80.62.11.5
Jamaica-5.9-11.2-11.1-10.9-10.8
Trinidad & Tobago2.223.825.619.717.2
Source: WEO.

Dollar-weighted GDP average.

Source: WEO.

Dollar-weighted GDP average.

The outlook for the Caribbean will continue to depend on external events as well as domestic policy responses. The Caribbean region is highly exposed to the risk of shocks, and downside risks have increased in a number of respects. Hurricane Dean, which swept through the Caribbean in late August, has lowered the growth outlook and increased inflation risk in a number of affected countries (in particular Dominica, Jamaica, and St. Lucia). Moreover, ongoing volatility in international financial markets could have an adverse impact on global growth, thus weakening prospects for Caribbean tourism and growth. The Caribbean remains, in particular, very dependent on developments in North America, given the strong linkages through tourism, remittances, and foreign investment flows. Thus, any slowdown in economic activity in the United States will have an adverse impact on Caribbean growth prospects.

Public Debt

(In percent of GDP)

Sources: WEO; and IMF staff estimates.

Further progress at reducing debt is critical to improving resiliency to shocks. Fiscal consolidation earlier during this economic cycle, in combination with debt restructuring in some cases, has led to a decline in debt ratios since 2003. Nevertheless, Caribbean countries continue to rank among the most heavily indebted countries in the world, with some posting debt-to-GDP ratios well above 100 percent. Looking ahead, the region remains committed to further debt reduction. For example, in 2006 the ECCU reconfirmed its objective of reducing public debt in all its member countries to below 60 percent of GDP. A revised benchmark for reaching the target by 2020 has been adopted, and ECCU countries have committed to establishing annual fiscal targets consistent with achieving the benchmark. Similarly, Jamaica is aiming for an improved primary surplus target this year.

Regional Integration Issues

Caribbean economies have historically been among the most open in the world. While this allows the Caribbean to reap the benefits of trade integration and globalization, it also poses challenges, particularly in light of the small size of many Caribbean countries. Regional cooperation can help overcome many of these challenges. Pooling resources, for example, helps the region take advantage of scale economies and share risk. Similarly, strengthening regional collaboration enables Caribbean countries to compete more effectively for productive foreign investment and adjust to changes in global trade patterns.

Three areas that relate to integration are currently high priorities: first, regional financial integration, as a means of developing and deepening financial systems and ultimately raising regional growth; second, tax incentives and investment, where harmonized regional action is key to overcoming collective action problems; and third, devising strategies to manage the erosion of trade preferences in EU export markets. The remainder of this chapter summarizes key issues in these areas (see Rodlauer and others, forthcoming, for details).

Exports Plus Imports of Goods and Services

(In percent of GDP)

Source: WEO.

Financial Integration

The Caribbean Community (CARICOM), established in 1973 and currently comprising 15 countries, is seeking to integrate national capital markets by removing restrictions on the provision of financial services and regional cross-border capital flows. Total financial sector assets in CARICOM exceed 150 percent of regional GDP, including sizable nonbanking as well as banking sectors, and the financial sector accounts for about 8 percent of regional output, above the G7 average of 7 percent. Regional financial conglomerates play a large role in the Caribbean, with combined assets of the nine largest financial conglomerates almost equivalent to regional GDP. The region’s financial center is Trinidad and Tobago, where the financial sector accounts for one-tenth of that country’s GDP, comparable to the share in Singapore.

Assets of Financial Institutions, 2004 1/

(In percent of GDP)

Sources: National authorities; and IMF staff calculations.

1/ Trinidad and Tobago and the Bahamas: 2003; Barbados: 2001.

2/ Weighted average.

While Caribbean financial markets are large in relation to GDP, they are generally not well developed. For example, regional primary bond markets are dominated by government securities, with illiquid secondary markets and outdated settlement and custody systems. Similarly, stock market turnover remains low by international standards. Trade in financial derivatives is also limited, and takes place over the counter, given the absence of secondary markets and organized exchanges.

Notwithstanding the framework provided by CARICOM, national financial markets in the Caribbean remain fairly segmented. Cross-border banking activity is limited, and regional offshore borrowing remains relatively small. Further evidence of segmentation is provided by uncorrelated interest rates, a relatively high degree of interest rate dispersion, and large and persistent price differences for cross-listed stocks. Integration could increase the availability of capital, especially to small firms and countries; spur improvements in financial regulations and standards; reduce the cost of capital; and, in the process, raise economic growth by helping channel resources to economic activities providing greater rates of return.

Improving prospects for integration and avoiding its pitfalls requires strong policies. One side effect of integrated financial markets is that shocks can spread across borders much more rapidly. Strengthened macroeconomic policies and conditions help limit contagion, especially for countries with high debt and large external current account deficits. Intra-Caribbean capital account liberalization, a central component of financial integration, also requires greater flexibility on the part of the monetary authorities. Some countries in the region need, in particular, to ensure that their market-based monetary policy instruments are adequate to manage liquidity in an integrated environment. Finally, stronger infrastructure and simpler trading rules can reduce transaction costs and market segmentation.

Cross-Country Standard Deviation of Short-term Interest Rate, Adjusted for Exchange Rates

(Sigma convergence)

Sources: National authorities; and IMF staff calculations.

Successful integration will also require strengthened regulatory oversight, particularly over regional conglomerates. Integration can introduce risks that are not yet known and, more generally, render the assessment and management of risks more difficult at the national level. As regional conglomerates increasingly become organized less along jurisdictional lines and more along functional lines, regional supervisors will, in particular, be challenged to ensure that “blind zones” do not emerge from segmented knowledge and/or jurisdictions. While Caribbean countries are taking steps to strengthen oversight, a number of issues merit greater priority in the regional context: continuing with efforts to improve supervision at the national levels; strengthening crisis management preparedness; and improving regional coordination on safety net and resolution issues for regional banks or groups.

Tax Incentives and Investment

Policymakers across the Caribbean have actively relied on incentives to attract FDI and generate jobs. As a result, there has been a proliferation of special investment incentives throughout the region, typically tax holidays that exempt corporations from income taxes and import duties for up to 25 years. With increased global capital mobility, regional governments have hesitated to reduce existing incentive schemes unilaterally, out of concern that investment will flow to other countries.

However, despite the widespread existence of incentives, the Caribbean’s share of regional and global investment has stagnated. FDI has grown in the Caribbean, but no faster than elsewhere in the world. The intraregional distribution of FDI is also uneven—the largest economies received the bulk of the investment flows into the Caribbean, but the smaller ECCU countries stand out as the largest recipients of FDI when measured relative to GDP. Furthermore, FDI flows are highly persistent over time in individual countries and tend to be concentrated in key export sectors, reflecting natural endowments.

Recent work by IMF staff confirms earlier findings emphasizing the importance of factors other than incentives in attracting investment. It shows that FDI in the Caribbean is sensitive to tax policy but only to a limited extent; other factors such as institutional quality, infrastructure development, governance, openness, and FDI restrictions are at least as important. Notably, FDI incentives do not appear to have a significant effect on FDI flows in a large developing country sample, although they matter in the sample of just Caribbean countries.

Tax and tariff incentives can also be costly. These costs include (1) eroding the tax base; (2) distorting resource allocation; (3) increasing administrative burdens; and (4) creating opportunities for rent seeking. While a thorough cost analysis is precluded by data limitations, the gap between annual revenues implied by statutory rates and actual collections is upward of 10 percent of GDP a year on average for the Caribbean. It should be emphasized that in addition to investment incentives, the gap reflects other exemptions as well as the efficiency of tax administration. However, it still indicates the broad scope of the losses.

Caribbean FDI as a Share of Regional Investment Flows

(In percent)

Sources: National authorities; and IMF staff estimates.

Potential Less Actual Taxes, 1995-2004

(In percent of GDP) 1/

Corporate Income TaxesImport-related TaxesTotal
Caribbean5.65.310.9
Dominican Republic4.03.97.9
Trinidad and Tobago3.32.45.7
Jamaica6.23.910.1
ECCU5.45.811.2
Other6.15.711.8
Source: Rodlauer and others (forthcoming).

Assumes corporate sector represents one-fourth of total GDP.

Source: Rodlauer and others (forthcoming).

Assumes corporate sector represents one-fourth of total GDP.

Policymakers should, therefore, consider reducing the scope of tax incentives. Directing savings from reducing tax incentives to efforts to improve other determinants of investment, such as better infrastructure and institutions, could, on a net basis, improve the prospects for attracting investment. It may also be more effective to lower statutory tax rates, while broadening the tax base.

To the extent that incentives are viewed as necessary, there is scope for making them more cost effective. Reform efforts could focus on (1) consolidating incentives in the legal code to remove discretion in granting exemptions; (2) replacing tax holidays with accelerated depreciation allowances; (3) avoiding the extension of incentives to new indirect taxes; (4) introducing time limits on exemptions while grandfathering investors eligible for incentives being repealed; and (5) publishing the cost of incentives to improve transparency.

Regional coordination can help overcome the collective action problem associated with reducing or eliminating incentives. Harmonization, for example, through a regional code of conduct, should follow some basic principles: protecting the tax system in each country; maintaining moderate and predictable taxation; avoiding tax discrimination; and limiting tax competition while respecting national sovereignty. The success of such codes will depend on countries’ commitments as well as on the existence of effective enforcement mechanisms. The effort and time necessary to develop such codes should, however, not be underestimated. By refocusing countries’ competitive efforts to attract investment more efficiently (such as by improving the overall business environment), regional coordination efforts can, more generally, confer significant benefits to both countries and foreign investors.

Trade Preference Erosion

Since 1993, the effective export prices for Caribbean bananas have been declining steadily, as the European Union has reduced preferential access. In 1993 the European Union removed internal trade barriers, exposing traditional Caribbean exporters to greater competition, although preferences were retained under the new common EU banana regime. In 1998, country-specific banana quotas were eliminated for all countries with preferential access to the European Union, which enabled more efficient African countries to gain an advantage over Caribbean producers. Finally, in 2006, the European Union replaced quotas for Latin American bananas with a MFN tariff of €176 per metric ton.

These trends are likely to continue over the medium term. In 2005, the European Union announced a four-year, 36 percent phased price reduction for internal sugar prices. This implies a cut of a similar magnitude for import prices from countries, including those in the Caribbean, continuing to enjoy access to the EU sugar market at above-world-market prices.

Caribbean Trade Preferences

Sources: National authorities; and IMF staff estimates.

While globally efficient, the erosion of preferential trading arrangements will lower the income of the countries that had been enjoying special access. IMF staff calculations suggest, for example, that the value of implicit assistance provided by the EU banana regime averaged about 8 percent of GDP annually for the Windward Islands of the Caribbean (except Grenada) and close to 3 percent of GDP for Belize and Suriname during 1977–2005. These estimates rely on several assumptions but indicate the broad magnitudes involved. Similarly, implicit assistance from the EU sugar regime has averaged nearly 10 percent of GDP annually for Guyana and 2–4½ percent of GDP for Belize.

For these reasons, the erosion of EU trade preferences has been, and will continue to be, very costly for some Caribbean countries, with significant adverse effects on the trade balance, output, and the overall fiscal balance. For St. Vincent and the Grenadines and St. Lucia, which depend heavily on bananas, output over the medium term could fall by 1½–2 percent relative to the baseline. Guyana faces a cumulative output decline of up to 6½ percent by 2010, as sugar trade preferences are phased out. Even in countries with smaller macroeconomic effects, the social costs can be severe, given the adverse impact on the incomes of poor rural households and aging farmers who have limited alternative employment opportunities.

Adaptation strategies will need to reflect varied individual country circumstances and could include the following:

  • Targeted safety nets and other steps to assist affected populations. Transition measures are critical to help vulnerable agricultural workers cope with the decline in incomes associated with preference erosion. Such measures could include establishing narrowly targeted income transfer schemes within the overall fiscal constraints, allowing workers to continue participation in national pension schemes with lower or no self contributions, and providing job searching and retraining opportunities where feasible.

  • Encouraging more efficient agricultural production. In some instances, remaining price competitive under the new trade regimes will likely require undertaking new investments, which can be challenging for countries with high debt and limited fiscal space. Asset sales and external investors can play useful roles.

  • Shifting out of traditional agriculture, in other cases, may be the only feasible option. Continuing efforts to improve the investment climate, lower business costs, and enhance labor skills will help encourage a reallocation of resources away from sectors that are no longer economically viable. Indeed, St. Kitts and Nevis and Trinidad and Tobago have already largely closed their once-large sugar industries.

Conclusions

The current economic and political context provides a favorable opportunity to reinvigorate reforms and advance integration. Regional growth remains strong and the external environment is still favorable. At the same time, recent or expected political transitions and renewals in the region can provide the necessary popular mandates to implement deep reforms and shore up fiscal and debt-reduction strategies.

Financial Sector Overview, 2006
ArgentinaBoliviaBrazilChileColombiaEcuadorMexico ParaguayPeruUruguayVenezuela
Financial system
Banking sector assets / GDP39.639.663.456.764.135.524.332.027.167.029.3
Financial sector credit 1/
Credit / GDP
Total credit26.636.531.568.648.022.645.423.332.824.215.1
of which: % in foreign currency13.683.5n.a.4.330.948.359.16.7
Credit to the private sector13.036.430.768.235.722.022.316.728.421.917.1
Credit to private enterprises7.714.019.045.524.78.613.711.514.5
Credit to households5.322.411.722.711.06.78.75.09.1
Credit to the public sector13.60.10.80.48.80.623.16.64.41.7-2.0
Credit growth (%), 2004-06 avg.
Total8.43.720.516.915.121.214.518.512.0-4.788.0
Private sector28.53.821.017.126.724.616.713.312.3-3.078.9
Corporate26.60.116.614.429.718.810.89.56.1
Household31.66.429.923.322.135.130.320.9-4.8
Public Sector-2.3-6.39.01.17.0-20.612.537.810.8-15.486.3
Mortgage lending
Share of GDP1.67.31.514.02.41.93.82.37.9
Growth (%), 2004-06 avg.3.97.912.820.1-6.539.516.215.81.5
Deposits
Total deposits / GDP26.138.025.154.723.425.116.623.619.851.334.3
Private deposits / GDP18.737.824.717.321.715.720.118.449.534.1
% foreign-currency-denominated12.476.80.2n.a.8.950.662.384.90.5
Interest rates (in percent)
Policy rate, end 20068.06.813.35.37.54.59.3
Short-term deposit rate (local curr.)6.53.712.65.46.85.33.510.93.62.310.0
Lending-deposit spread
Mortgage3.44.99.23.7
Personal19.55.339.521.912.85.628.110.734.834.4
Corporate8.713.65.05.24.05.45.624.67.4
Nonbank financial institutions
Total credit / GDP0.47.65.95.210.82.90.4
Credit to the private sector / GDP0.47.65.45.03.12.80.3
Change (2004-06 avg.)0.1-0.50.30.50.30.1-0.7
Mutual funds assets / GDP2.939.212.17.5
Pension funds assets / GDP13.620.116.160.714.17.915.413.4
Of which: Public sector assets55.276.213.147.675.319.088.0
Corporate sector assets14.49.827.419.817.043.83.9
Financial sector assets20.611.327.217.91.528.08.1
Local capital markets
Stock markets
Market capitalization / GDP24.166.5119.641.441.542.88.642.1
Chg. in market cap. / GDP (2004-06 avg.)-1.18.50.47.87.46.6-0.49.7
Price growth (%, y-o-y)49.932.934.417.348.6168.3
P/E ratios16.79.020.721.417.733.3
Volatility (30-day annualized)18.717.710.718.813.018.4
Turnover ratio (%) 2/6.846.518.627.827.615.01.53.1
Number of new domestic listings in 20064.030.07.04.04.03.00.03.0
Government bond markets
Amount outstanding / GDP28.448.010.232.218.65.09.5
Chg. in amt. outstanding / GDP (2004-06 avg.)0.51.1-5.91.21.20.314.6
Turnover ratio (%) 2/33.50.6115.510.6
Number of new listings in 200683.05.023.02.012.03.0
Growth in new listings (%, 2004-06 avg.)231.4-16.753.41.4-9.8-19.8
Corporate bond markets
Amount outstanding / GDP5.40.510.30.53.32.7
Chg. in amt. outstanding / GDP (2004-06 avg.)-0.50.0-0.90.10.0-0.1
Turnover ratio (%) 2/31.13.2126.912.5
Number of new listings in 2006529.071.0447.024.088.079.0
Growth in new listings (%, 2004-06 avg.)107.544.821.441.31.322.0
Sources: National authorities; World Federation of Exchanges; Bloomberg, L.P.; Bank of International Settlements (BIS); International Federation of Pension Funds Administrators (FIAP); Investment Company Institute (ICI); Shah and others (2007); Shah and others (forthcoming); WEO; and IMF staff estimates.

Includes banks and nonbank financial institutions. Data reported for banks only for Colombia, Dominican Republic, Honduras, and Panama.

The total share of value traded in 2006 divided by the average domestic market capitalization of 2005 and 2006 for Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

Sources: National authorities; World Federation of Exchanges; Bloomberg, L.P.; Bank of International Settlements (BIS); International Federation of Pension Funds Administrators (FIAP); Investment Company Institute (ICI); Shah and others (2007); Shah and others (forthcoming); WEO; and IMF staff estimates.

Includes banks and nonbank financial institutions. Data reported for banks only for Colombia, Dominican Republic, Honduras, and Panama.

The total share of value traded in 2006 divided by the average domestic market capitalization of 2005 and 2006 for Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

Financial Sector Overview, 2006
Costa RicaEl SalvadorGuatemalaHondurasNicaraguaPanamaDom. Rep.JamaicaTrinidad & Tobago
Financial system
Banking sector assets / GDP62.163.160.054.758.2133.634.862.850.3
Financial sector credit1/
Credit / GDP
Total credit43.249.239.551.133.797.419.442.936.5
of which: % in foreign currency39.6n.a.37.530.783.7n.a.18.4
Credit to the private sector37.842.931.247.933.391.716.835.035.3
Credit to private enterprises15.70.017.542.812.39.122.5
Credit to households15.814.749.74.57.612.8
Credit to the public sector5.46.83.20.45.72.68.01.3
Credit growth (%), 2004-06 avg.
Total23.95.519.020.229.612.1-31.49.711.9
Private sector26.16.917.420.530.412.26.717.817.3
Corporate25.227.710.3-0.413.616.6
Household24.533.813.646.428.318.7
Public Sector19.030.116.10.013.211.9-10.5-18.7
Mortgage lending
Share of GDP8.74.50.83.6
Growth (%), 2004-06 avg.29.641.5109.617.7
Deposits
Total deposits / GDP46.738.441.155.641.7143.129.241.336.8
Private deposits / GDP43.632.340.352.6129.224.538.732.2
% foreign-currency-denominated49.2n.a.27.430.8n.a.28.8
Interest rates (in percent)
Policy rate, end 20069.85.06.08.012.08.0
Short-term deposit rate (local curr.)11.34.94.86.04.97.55.0
Lending-deposit spread8.0
Mortgage4.72.123.411.8
Personal10.35.28.911.8
Corporate9.52.82.95.98.7
Nonbank financial institutions
Total credit / GDP6.41.32.110.110.3
Credit to the private sector / GDP6.40.72.18.19.6
Change (2004-06 avg.)0.6-0.60.40.6-1.4
Mutual funds assets / GDP4.82.9
Pension funds assets / GDP5.018.019.20.42.1
Of which: Public sector assets64.278.60.0
Corporate sector assets2.10.31.9
Financial sector assets22.015.698.1
Local capital markets
Stock markets
Market capitalization / GDP39.855.0
Chg. in market cap. / GDP (2004-06 avg.)5.320.1
Price growth (%, y-o-y)11.1
P/E ratios
Volatility (30-day annualized)14.2
Turnover ratio (%) 2/2.4
Number of new domestic listings in 20064.0
Government bond markets
Amount outstanding / GDP23.212.071.8
Chg. in amt. outstanding / GDP (2004-06 avg.)12.00.07.4
Turnover ratio (%) 2/
Number of new listings in 20060.045.0
Growth in new listings (%, 2004-06 avg.)60.6
Corporate bond markets
Amount outstanding / GDP23.34.60.40.00.412.10.6
Chg. in amt. outstanding / GDP (2004-06 avg.)1.30.60.00.0-0.20.10.2
Turnover ratio (%) 2/20.4119.8103.20.023.9121.532.7
Number of new listings in 200643.010.02.02.01.022.00.0
Growth in new listings (%, 2004-06 avg.)15.55.461.10.00.041.90.0
Sources: National authorities; World Federation of Exchanges; Bloomberg, L.P.; Bank of International Settlements (BIS); International Federation of Pension Funds Administrators (FIAP); Investment Company Institute (ICI); Shah and others (2007); Shah and others (forthcoming); WEO; and IMF staff estimates.

Includes banks and nonbank financial institutions. Data reported for banks only for Colombia, Dominican Republic, Honduras, and Panama.

The total share of value traded in 2006 divided by the average domestic market capitalization of 2005 and 2006 for Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

Sources: National authorities; World Federation of Exchanges; Bloomberg, L.P.; Bank of International Settlements (BIS); International Federation of Pension Funds Administrators (FIAP); Investment Company Institute (ICI); Shah and others (2007); Shah and others (forthcoming); WEO; and IMF staff estimates.

Includes banks and nonbank financial institutions. Data reported for banks only for Colombia, Dominican Republic, Honduras, and Panama.

The total share of value traded in 2006 divided by the average domestic market capitalization of 2005 and 2006 for Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

Caribbean average is the arithmetic average of the following 15 Caribbean countries: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Trinidad and Tobago, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Suriname.

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