Fiscal Sustainability and Policy Issues in the Eastern Caribbean Currency Union

The fiscal position of the Eastern Caribbean Currency Union (ECCU) has deteriorated significantly in recent years, resulting in sharp increases in public debt. The sustainability of public debt is examined using the public sector budget constraint to derive the maximum public-debt-to-GDP ratio that can be sustained based on a country's projected steady-state primary balance, interest rate on public debt, and economic growth rate. In this context, government deficits and debt in several ECCU member countries appear unsustainable, posing a risk to the stability of the currency union. A critical issue facing member countries is to implement fiscal policies consistent with sustainable public finances and debt to underpin the currency union.

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Year of publication:	2003-08-01
Authors:	Pellechio, Anthony J. ; Rizavi, Saqib ; Kufa, Phebby
Institutions:	International Monetary Fund (IMF)
Subject:	Fiscal sustainability \| Fiscal reforms \| Eastern Caribbean Currency Union \| public debt \| debt ratio \| fiscal policies \| central bank \| fiscal performance \| government debt \| fiscal positions \| fiscal policy \| government deficit \| fiscal constraints \| debt service \| debt ratios \| fiscal position \| public sector debt \| fiscal deficits \| budget constraint \| public expenditure \| external financing \| fiscal adjustment \| fiscal indicators \| tax revenue \| budget deficits \| revenue collection \| payment arrears \| government budget \| domestic financing \| tax rates \| tax administration \| external debt \| sovereign debt \| fiscal rules \| capital expenditure \| fiscal deficit \| debt accumulation \| fiscal consolidation \| government deficits \| central government expenditure \| fiscal targets \| taxation \| debt restructuring \| fiscal balance \| ratio of debt \| government revenue \| primary expenditure \| government expenditure \| debt obligations \| fiscal indiscipline \| central government fiscal \| fiscal agent \| fiscal discipline \| fiscal convergence \| tax base \| external payment \| public finances \| primary deficit \| structural fiscal \| debt service payments \| external public debt \| fiscal situations \| fiscal policy rules \| debt-service \| fiscal sustainability analysis \| commercial borrowing \| debt sustainability \| external payments arrears \| fiscal imbalances \| national debt \| fiscal measures \| sovereign borrowers \| current account \| government budget deficit \| tax system \| reserve bank \| government budget constraint \| short-term debt \| accumulation of arrears \| fiscal crises \| debt burden \| debt-service obligations \| fiscal barriers \| tax structure \| budget deficit \| expansionary fiscal \| tax reform \| domestic debt \| currency board \| actual debt \| fiscal course \| expenditure reform \| expenditure composition \| debt stock \| fiscal component \| tax policy \| current account deficit \| expansionary fiscal policies \| fiscal developments \| national tax systems \| expenditure ratio \| external payments \| debt dynamics \| fiscal restraint \| budget process \| government budget deficits \| annual budget \| tax systems \| fiscal retrenchment

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series IMF Working Papers Number 03/162 3 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005605374