Strengthening Fiscal Consolidation and Sustaining Growth

Transcription

1 Strengthening Fiscal Consolidation and Sustaining Growth February 11, 2014 Conference Centre Wildey, St Michael

2 2013 A Year of Challenges and Achievements for CDB Evidence of commitment by BMCs to take tough decisions to fix fiscal and debt issues Signs of incipient economic growth in most BMCs New focus on the need to create a different type of Caribbean economy

3 2013 A Year of Challenges and Achievements for CDB Internally, success in integrating a new leadership team and the on-boarding of the next generation of CDB professionals Consolidation of key internal reforms, especially in enterprise-wide risk management

4 Presentation Roadmap

5 Part A CDB s Performance in 2013

6 USD million CDB s Operations at a Glance Chart Title Grants Loans Total Approvals Loans Disbursed Total Disbursed

7 USD million Loan Approvals by Borrower % of Total Loans 28% of Total Loans 18% of Total Loans 0.0 ANG ANT BAH BAR BEL DO GUY REG SVG OCR SDF

8 Highlights of CDB s Operations Suriname becomes CDB member on September 17, 2013 Moody s Investors Service removes negative outlook on CDB s credit rating CDB accredited to United Nations Framework Convention on Climate Change (UNFCCC) USD23.5 mn Community Disaster Risk Reduction Trust Fund launched

9 Highlights of CDB s Operations Board agree to EU and CDB entering into a Contribution Agreement to implement several components of ACP-EU Natural Disaster Risk Management Programme in CARIFORUM member countries (USD17 mn). USD52 mn BNTF 7 Programme launched. CDB and EU sign agreements (USD9 mn) (EUR 6.95 mn) for CSME Standby and CARIFORUM-EU EPA Standby facilities for capacity building. CDB and IDB sign USD20 mn Global Loan to benefit IDAeligible OECS countries

10 2014 and Beyond Internal Focus Increased Accountability Better communications with internal and external clients Managing for development results/value for money External Focus - Portfolio Diversification Geographical - increased lending to BMCs with low exposure to CDB Sectoral - renewable energy/energy efficiency; private sector

11 Part B Regional Economic Developments: Review of 2013 and Outlook for 2014

12 Source: Bloomberg L.P. Global growth strengthened and inflation remained low; FDI flows increased

13 Growth led by goods-based BMCs, but servicesbased BMCs also improved Growth (%) in Real Output, * Sources: national statistics offices, central banks and CDB *Data for 2013 are preliminary CDB estimates

14 Most regional destinations also saw continued tourism recovery Growth (%) in Stay-Over Arrivals * Sources: Caribbean Tourism Organisation, Eastern Caribbean Central Bank *2013 figures as at month indicated

15 Growth remains below comparators, as structural challenges persist Growth (%) in Real Output, * Sources: IMF, ECCB and CDB *Data for 2013 are preliminary CDB estimates

16 Mixed fiscal performances Some high-debt BMCs of concern Change in Debt and Debt/GDP Ratio, 2013 Sources: IMF, CDB estimates

17 Setting the Stage for Sustained Growth and Resilience Improving competitiveness institutional reforms to facilitate business activity infrastructure investment to reduce costs/improve competitiveness enhanced technological readiness alignment of HRD policies with industrial development needs Strengthening regional integration Climate proofing economic infrastructure Increasing national savings

18 Global outlook Output & FDI growth set to accelerate in Growth (%) Projections, 2014 and 2015 Source: IMF World Economic Outlook January 2014 update

19 Regional growth therefore also expected to accelerate Growth (%) Projections, 2014 and 2015 Source: IMF/CDB Projections

20 Part C Strengthening Fiscal Consolidation and Sustaining Growth

21 Regional policymakers faced with critical policy challenges Fiscal Adjustment Compounded by: vulnerability to natural hazards and climate change impacts Business Facilitation Reforms Competing Financing Needs Financial Reforms vulnerability to external shocks Infrastructure Development

22 Key Policy Imperatives The process of fiscal consolidation is unfinished Increased fiscal effort needed to reduce macro-economic imbalances and vulnerabilities Higher sustained income growth is necessary to consolidate debt sustainability and reduce poverty Greater focus on structural reforms for increasing growth and building resilience required

23 Enhancing Fiscal Consolidation Tax reforms Increase economic efficiency Improve tax administration Expenditure Reforms Streamline expenditure Improve budget systems Divest non-core activities Improve debt management

24 Challenging environment will have implications for CDB operations CDB s engagement with BMCs in 2014 will, therefore, focus on: Adjustment Competitiveness Resilience as well as access to finance for investment in these areas.

25 Thank you for your attention. Questions?