Eastern Caribbean Currency Union

The Eastern Caribbean Currency Union (ECCU) is gradually recovering following the catastrophic impact of Hurricanes Irma and Maria in 2017. Tourism is slowly picking up in hurricane-stricken countries and has remained strong elsewhere in the ECCU. Conditions remain favorable to growth, but risks are increasing. The fiscal balance for the region as a whole—which is particularly important in a quasi-currency board arrangement—worsened in 2017, reflecting lower inflows from citizenship-by-investment programs and higher reconstruction and current spending. While public debt has declined, helped by debt relief operations in some countries, the ECCU debt target of 60 percent of GDP by 2030 remains elusive for most countries. Important progress has been made in financial sector reforms, but long-standing weaknesses and emerging risks weigh on growth prospects and may entail fiscal costs. External deficits remain large, highlighting low competitiveness. Natural disasters are becoming more frequent and intense, compounding these vulnerabilities.