Feb 11, 2014 - Strengthening. Fiscal Consolidation and ... Consolidation of key internal reforms, especially in ... *Dat
Strengthening Fiscal Consolidation and Sustaining Growth
February 11, 2014 Conference Centre Wildey, St Michael
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
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
Presentation Roadmap
Part A CDB’s Performance in 2013
CDB’s Operations at a Glance
Chart Title 186
USD million
200
166
157
147
139
150
116
104
85
100 62 50
18
0 Grants
Loans
Total Approvals
2012
Loans Disbursed
2013
Total Disbursed
Loan Approvals by Borrower 2013 40.0
28% of Total Loans 25% of Total Loans
35.0
USD million
30.0
25.0
18% of Total Loans
20.0 15.0 10.0
5.0 0.0
ANG OCR 3.2 SDF 0.0
ANT 35.3 0.0
BAH 0.0 0.8
BAR 39.9 0.0
BEL 11.2 0.0
DO 2.4 0.8
GUY 2.9 22.1
REG 6.6 6.4
SVG 7.5 0.0
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
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
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
Part B
Regional Economic Developments: Review of 2013 and Outlook for 2014
Global growth strengthened and inflation remained low; FDI flows increased
Source: Bloomberg L.P.
Growth led by goods-based BMCs, but servicesbased BMCs also improved Growth (%) in Real Output, 2008-2013*
Sources: national statistics offices, central banks and CDB *Data for 2013 are preliminary CDB estimates
Most regional destinations also saw continued tourism recovery Growth (%) in Stay-Over Arrivals 2008-2013*
Sources: Caribbean Tourism Organisation, Eastern Caribbean Central Bank *2013 figures as at month indicated
Growth remains below comparators, as structural challenges persist Growth (%) in Real Output, 2008-2013*
Sources: IMF, ECCB and CDB *Data for 2013 are preliminary CDB estimates
Mixed fiscal performances Some high-debt BMCs of concern Change in Debt 2007-2013 and Debt/GDP Ratio, 2013
Sources: IMF, CDB estimates
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
Global outlook Output & FDI growth set to accelerate in 2014-15 Growth (%) Projections, 2014 and 2015
Source: IMF World Economic Outlook January 2014 update
Regional growth therefore also expected to accelerate Growth (%) Projections, 2014 and 2015
Source: IMF/CDB Projections
Part C
Strengthening Fiscal Consolidation and Sustaining Growth
Regional policymakers faced with critical policy challenges Compounded by: – vulnerability to natural hazards and climate change impacts
Fiscal Adjustment
Business Facilitation Reforms
Competing Financing Needs
Infrastructure Development
Financial Reforms
– vulnerability to external shocks
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
