Security & Strategic Review - May 2023

REGION: Stark assessment of challenges facing Caribbean economies

In its April Fiscal Monitor, the International Monetary Fund (IMF) suggested that general gross debt in emerging markets and middle-income economies in the Caribbean region would decrease by around 1.1% in 2023, however it warned that pressures could build up again by 2024. And, at a press briefing given on 12 April, the director of the IMF’s Fiscal Affairs Department, Vitor Gaspar, warned that by 2028, “public debt in the world is expected to reach 100% of GDP back to the record levels set in the year of the [Covid-19] pandemic.” He added: “It is worth pointing out that primary deficits are also predicted to stop declining and to stay above pre-pandemic levels over the medium term”. This is particularly unwelcome news for the climate-change vulnerable economies of the Caribbean at a time when they are seeking unprecedented levels of funding to build climate resilience. A report presented last year at the United Nations Climate Change Conference (COP27) estimated that developing countries collectively need US$2trn a year to respond to the challenge of climate change.

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