Limited fiscal space and excessive public debt, financial sector stress, and weak external competitiveness continue to hold back the Eastern Caribbean Currency Union’s economic recovery.
Following the conclusion of the annual review on the common policies of member countries of the ECCU, the Executive Board of the International Monetary Fund (IMF) issued a release, in which they emphasised the need for ambitious, credible medium term fiscal consolidation to put public debt on a sustainable path, and recommended a two pronged approach to reducing fiscal imbalances.
On the expenditure side, (i) reduce the wage bill and budget transfers to state owned enterprises, (ii) better prioritising of public investment and (iii) consolidating government functions through broader regional collaboration. On the revenue side, (i) a coordinated regional strategy to streamline tax incentives, (ii) reduce intra regional tax competition, and (iii) enhance transparency in tax systems.
The Directors underscored the need for prudent management of citizenship by investment programmes, backed by strong due diligence and a transparent operational framework.
The release can be read in its entirety here.