1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > East Caribbean Business Forecast Report Q3 2014

East Caribbean Business Forecast Report Q3 2014

  • May 2014
  • -
  • Business Monitor International
  • -
  • 42 pages

Core Views

We believe that the East Caribbean region will continue to see a modest economic recovery in the coming quarters, anticipating that the region’s more diversified economies will benefit from slightly stronger global growth. Meanwhile, those countries most reliant on tourism and financial services will continue to struggle, as we expect these industries are unlikely to return to pre-crisis levels in the foreseeable future. We expect that Caribbean economies will continue to face economic headwinds in the coming years in light of rising debt burdens, fixed exchange rate regimes, and modest growth prospects. These factors, combined with our view that neither the tourism nor financial services sectors will see a significant recovery in the next few years, mean that we do not rule out additional credit events or major balance of payments corrections in some of the small island economies.

Should the Venezuelan government significantly alter the terms of its Petrocaribe programme, which provides subsidised oil imports to many Caribbean economies, it could send import bills much higher and potentially cause some countries to default on their outstanding oil loans.

Major Forecast Changes

We have revised our current account forecasts for Guyana to account for wider shortfalls in the coming years. We forecast the current account deficit to come in at 15.7% of GDP (17.5% previously), slightly narrower than an estimated 17.0% of GDP in 2013 (previously 14.3%). Guyana’s current account balance deteriorated more than we anticipated in the first three quarters of 2013, and we expect that the price of gold, one of the country’s main exports, will remain under pressure in the coming quarters.
We have revised our Barbados current account forecast for 2014 to reflect a deficit of 10.3% of GDP, down from an estimated 14.3% of GDP in 2013. This change is due to our expectation that depressed private consumption growth will weigh on imports of goods and services, as well as our view that exports should rebound after an estimated 18.0% contraction in 2013.

Table Of Contents

East Caribbean Business Forecast Report Q3 2014
Executive Summary . 13
Core Views .13
Major Forecast Changes 13
Key Risks To Outlook .13
Chapter 1.1: Political Outlook - Barbados 15
Domestic Politics . 15
Intra-Party Dissent Threatens Austerity Policies ..15
While the political opposition has long criticised the fiscal austerity measures implemented by the government of Barbadian Prime
Minister Freundel Stuart, opposition from within his Democratic Labour Party is growing, leading us to believe that the potential for a
policy reversal is greater than it has been in the past. If the reforms were to be watered down, we would see greater likelihood that
Barbados would be unable to address its fiscal and current account imbalances on its own, pushing it closer to turning to international
lenders to avert a balance of payments crisis.
Chapter 1.2: Economic Outlook - Barbados .. 17
Fiscal Policy . 17
Growing Risk Of Greater Fiscal Deterioration In 2014 17
While austerity measures passed by the Barbadian parliament in late 2013 have contributed to a contraction in expenditure, revenues
continue to collapse due to high unemployment and weakness in the island's tourism sector. As a result, we believe the recent rally in
Barbadian debt yields may be premature given the growing risk for continued fiscal deterioration in 2014.
table: BARBADOS Fiscal Policy ..18
Chapter 2.1: Political Outlook - Guyana 19
Domestic Politics . 19
Little Upside Ahead For Short-Term Political Risk Rating ..19
We expect that Guyana's Short-Term Political Risk Rating will remain one of the weakest out of the major Caribbean countries in the
coming quarters. Indeed, ethno-political divisions, tensions between the executive and legislative branches, and inadequate fiscal
resources to combat drug trafficking will continue to cap the country's scores in the 'social stability', 'policy making' and 'security/external
threats' components of our ratings.
Chapter 2.2: Economic Outlook - Guyana 21
Balance Of Payments . 21
Wide Current Account Deficit To Deplete Reserves 21
Guyana's current account shortfall will remain substantial this year at 15.7% of GDP, only slightly narrower than an estimated 17.0% of
GDP in 2013. Moreover, with the capital account surplus having been insufficient to offset the current account deficit in recent quarters,
we expect downside pressure on the country's stockpile of international reserves to persist.
table: Guyana Current Account 22
Chapter 3.1: Political Outlook - Trinidad and Tobago .. 23
Domestic Politics . 23
Ruling Coalition Likely To Face Stiff Challenge In 2015 Elections .23
We believe that Trinidad and Tobago's ruling People's Partnership coalition will face a strong challenge from the opposition People's
National Movement (PNM) in general elections scheduled for May 2015, as a recent spike in violent crime and several years of tepid
economic growth have weighed on public perceptions of the government's job performance. That said, we will be monitoring the results
of the PNM's ongoing leadership contest for a clearer indication of the opposition's prospects in the general election.
table: Trinidad and tobago Political Overview 23
Chapter 3.2: Economic Outlook - Trinidad and Tobago .. 25
Fiscal Policy . 25
Budget Deficit To Peak In 2014 .25
Trinidad and Tobago's nominal budget deficit will widen as a percentage of GDP in 2014, driven by elevated levels of government
spending. We expect the deficit will begin to narrow in 2015, as stronger economic growth bolster revenue inflows.
table: Trinidad and Tobago Fiscal Policy 25
Monetary Policy . 27
Rising Core Inflation To Prompt Rate Hikes By Year-End 27
A recent central bank survey indicates that business confidence in Trinidad and Tobago is relatively strong, bolstering our view that the
twin islands' economic recovery will continue to gain steam in the coming months. As such, given rising core inflationary pressures, we
forecast that the bank will begin a monetary tightening cycle in H214.
table: Trinidad and Tobago Monetary Policy ..27
Chapter 4: Regional .. 29
Regional Outlook I 29
Economic Citizenship Programmes No Silver Bullet .29
tabl e: Caribb ean Ec onomic Citi zenship Programm es 29
Regional Outlook II .. 31
Expansionary Fiscal Policies Could Heighten Credit Risk In ECCU .31
Chapter 5: Country Summaries . 29
Montserrat 33
Economic Activity 33
Tourism A Potential Growth Area 33
Grenada . 35
Economic Activity 35
Debt Restructuring Back On Track .35
table: Grenada Macroeconomic Forecasts ..35
TABLE: Grenadian Governm ent 's Proposed Debt Restr uct uring Opti ons . 36
St Kitts and Nevis . 37
Economic Activity 37
Moderately Stronger Growth Ahead ..37
table: st kitts and nevis Economic Activity ..37
Chapter 6: BMI Global Assumptions .. 41
Global Outlook . 41
Growth Increasingly Polarised ..41
Table: Global Assumptions ..41
Tabl e: Developed Stat es, Real GDP Growt H, % 42
Tabl e: Em erging Mar kets , Real GDP Growth , % ..43

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Amrita

+1 718 303 2019

Purchase Reports From Reputable Market Research Publishers
Biorefinery Technologies: Global Markets

Biorefinery Technologies: Global Markets

  • $ 6650
  • Industry report
  • July 2016
  • by BCC Research

This BCC Research report provides a critical evaluation of the current status of commercial biorefinery markets and the ways in which recent environmental legislation and breakthroughs in technology will ...

Oilfield Process Chemicals: Global Markets

Oilfield Process Chemicals: Global Markets

  • $ 6650
  • Industry report
  • September 2016
  • by BCC Research

Use this report to: - Analyze the chemicals involved in oil and gas exploration and production at the chemical manufacturing sales level - Discuss and classify the market on the basis of chemical application, ...

Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

  • $ 6328
  • Industry report
  • October 2016
  • by MarketsandMarkets

“The industrial plugs & sockets market is projected to grow at a CAGR of 4.82% from 2016 to 2021” The industrial plugs & sockets market is projected to reach USD 3.60 billion by 2021, growing at a ...


Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.