Presentations

Time to D.E.C.I.D.E

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Summary
  1. Time to D.E.C.I.D.E. February 24, 2016 Dr. Justin Ram Director of Economics Caribbean Economic Review and Outlook
  2. Presentation Outline • Part A: Global Economic Outlook • Part B: Caribbean Economic Review and Outlook • Part C: Vision and policy response
  3. Global Economic Outlook Part: A
  4. Global growth > in 2016 Source: IMF WEO January 2016 Update
  5. Uncertainty a toxic cocktail Looking Down • Geopolitical uncertainty • Stock market turmoil • Slowdown in emerging markets, especially China • Currency volatility • Low oil prices costing producers and financers • Possible instability in Europe, Brexit • Increased risk of US recession? • Zika virus • El Nino Looking up • US unemployment rate the lowest since 2009 • Increase in US wages • Low oil prices benefitting consumers IMF recently revised down global growth for 2015 and 2016
  6. Source: IMF WH REO October 2015 Mixed fortunes closer to home
  7. Caribbean Economic Review and Outlook Part: B
  8. Continued growth < comparators Sources: IMF, ECCB and CDB. Data for 2015 are preliminary CDB estimates
  9. BMC growth in 2015 Sources: BMCs, CDB preliminary estimates
  10. Tourism: Most regional destinations saw continued recovery in stayover arrivals Source: Caribbean Tourism Organisation *2015 figures as at month indicated Growth (%) in Stay-Over Arrivals 2010-2015*
  11. Commodity prices are falling: mixed fortunes and risks for BMCs Source: IMF, World Gold Council
  12. The fiscal story Sources: IMF, CDB estimates
  13. Trade: foreign exchange reserves
  14. Unemployment is still high Source: BMC Statistical Offices
  15. Low productivity does not bode well for growth Source: The Conference Board. 2015. The ConferenceBoard Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/
  16. Still tough going for businesses Source: World Bank Group
  17. Here’s why we score poorly in Doing Business rankings Source: World Bank Group
  18. Logistics: BMCs lagging behind Source: World Bank Group
  19. What’s the 2016 Outlook? CDB forecasts regional growth of 0.3% Source: CDB
  20. Where are the risks in 2016? • Global economic downturn • Political uncertainty in Venezuela • Continued warming of US/Cuba relations • Potential threat of Zika virus • Commodity exporters need to make difficult decisions • US Presidential election • Olympics in Rio de Janeiro • Reduction in correspondent Banking relationships • Weather-related events
  21. Our Vision for the Caribbean: Time to D.E.C.I.D.E. and Policy Recommendations Part: C
  22. Our Vision for our Caribbean economies What do we want our Caribbean economies to be? Dynamic, Export-oriented, Competitive, Inclusive, Diverse and Environmentally-resilient economies (D.E.C.I.D.E.) This requires:  Private sector led growth  Educated and flexible labour force  Regionally integrated  Government as facilitator and efficient regulator  Energy security
  23. Policy Actions: DECIDE 1. We need a strategy that will allow us to take advantage of technological innovation, to identify and encourage higher productive activity. 2. At the same time we need to improve the Investment Climate: make it easier for private sector to thrive (doing business reforms). 3. Labor Market Reforms: increase flexibility, freedom of movement, participation and productivity. 4. Human Capital Development: Investment in quality education for all, with emphasis on science, technology, engineering and mathametics (STEM).
  24. Policy Actions: DECIDE 5. Fiscal Consolidation: Fiscal rules, increase efficiency of revenue collection and expenditure, prioritise capital investment, reform of subsidies. 6. Although we have low fuel prices we still need energy reform that will improve our energy security, through use of RE in energy mix and greater EE (oil and non-oil producers). 7. Policy environment that assists MSMEs such as access to credit. 8. Targeted and affordable social protection, this is applicable social safety nets, transfers and subsidies.
  25. Policy Actions: DECIDE 9. Maximise regional integration and take advantage of free trade agreements such as EPA and seek new agreements. 10. Improve Regional Transport and Logistics: increase efficiency of movement of people and goods across the region. 11. Mandate building and infrastructure codes to improve resilience. 12. Measures required to minimise the spread of new diseases. 13. Improve the level of national savings to support investment and fiscal buffers.
  26. Questions? Thank you for your attention