Eastern Caribbean Currency Union: 2025 Staff Report for the 2025 Discussion on Common Policies of Member Countries-Press Release; and Staff Report

International Monetary Fund

No 2025/104, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper presents a detailed review report for the 2025 Discussion on Common Policies of Member Countries of the Easter Caribbean Currency Union (ECCU). The currency union has provided a strong anchor for macroeconomic stability. The ECCU has achieved a strong rebound from successive adverse shocks. Strong tourism performance and continued infrastructure investments have supported robust post-pandemic growth, while inflation has moderated in tune with global trends. Downside risks to the outlook are significant amid a highly uncertain external environment, where increased trade and geopolitical tensions could give rise to renewed inflationary pressures and disruptions to tourism and foreign direct investment inflows. High public debt, persistent current account deficits, and weaknesses in the local financial system amplify vulnerability to recurrent natural disaster shocks alongside the uncertain outlook for future Citizenship-by-Investment inflows. Enhancing financial system resilience and reducing persistent credit-frictions can support a more conducive environment for growth-supporting local investment. Strengthening economic data could significantly improve regional policy design and risk management.

Keywords: policy uncertainty; staff appraisal; ECCU economy; tailoring policy; ECCU country; Financial sector stability; Monetary unions; Anti-money laundering and combating the financing of terrorism (AML/CFT); Loans; Caribbean; Global (search for similar items in EconPapers)
Pages: 85
Date: 2025-05-08
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