Business Monitor International


East Caribbean Business Forecast Report

Published 28 May 2014

  • 39 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
East Caribbean Business Forecast Report

Core Views:

  • We believe that the 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:

  • Weak commodity price growth this year, combined with a contraction in real GDP growth and rising unemployment, will result in consumer price growth in Barbados slowing from an average of 1.8% in 2013 to 1.4% this year, revised down from our earlier forecast of 2.2% average inflation this year.

  • We continue to believe that Jamaica's economy will grow more quickly in 2014 than in recent years, although the slow improvement in the trade account has tempered our expectations and we have downgraded our growth forecast. We now expect real GDP expansion of 1.6% in 2014, and 1.8% in 2015.

  • We are increasing our 2014 fiscal deficit forecast for Guyana modestly, from 3.1% to 3.5%, as weak mining sector activity looks set to temper revenue growth this year. Moreover, the recent...

Table of Contents

Executive Summary
13
Core Views
13
Major Forecast Changes
13
Key Risks To Outlook
13
Chapter 1
15
Domestic Politics
15
Intra-Party Dissent Threatens Austerity Policies
15
Chapter 1
17
Fiscal Policy
17
Growing Risk Of Greater Fiscal Deterioration In 2014
17
table: BARBADOS Fiscal Policy
18
Chapter 2
19
Domestic Politics
19
Little Upside Ahead For Short-Term Political Risk Rating
19
Chapter 2
21
Balance Of Payments
21
Wide Current Account Deficit To Deplete Reserves
21
table: Guyana Current Account
22
Chapter 3
23
Domestic Politics
23
Ruling Coalition Likely To Face Stiff Challenge In 2015 Elections
23
table: Trinidad & tobago Political Overview
23
Chapter 3
25
Fiscal Policy
25
Budget Deficit To Peak In 2014
25
table: Trinidad & Tobago Fiscal Policy
25
Monetary Policy
27
Rising Core Inflation To Prompt Rate Hikes By Year-End
27
table: Trinidad & 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
TABLE: Montserrat MACROECONOMIC DATA AND FORECASTS
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 & Nevis
37
Economic Activity
37
Moderately Stronger Growth Ahead
37
table: st kitts & 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: BMI VE RSUS BLOO MBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
Tabl e: Em erging Mar kets , Real GDP Growth , %
43

The East Caribbean Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Anguilla, Antigua & Barbuda, Barbados, Dominica, Grenada, Guyana, Montserrat, St Kitts & St Nevis, St Lucia, St Maarten, St Vincent & The Grenadines, Suriname and Trinidad & Tobago and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The East Caribbean's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The East Caribbean's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The East Caribbean's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The East Caribbean, including currency volatility, the commodity price boom and protectionist policies.

The East Caribbean Business Forecast Report by Business Monitor International (BMI) includes two major sections: Economic Outlook and Political Outlook.

Economic Outlook:

How will the the East Caribbean economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The East Caribbean through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The East Caribbean Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The East Caribbean and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The East Caribbean, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The East Caribbean over the next 5-years?

BMI's The East Caribbean country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the the East Caribbean Market - Political Strengths, Weaknesses, Opportunities and Threats facing The East Caribbean.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The East Caribbean's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The East Caribbean's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express