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Banks battle impact of Caribbean economic woes

Growing public debt, falling GDP rates and rising unemployment are casting a shadow over the Caribbean region. Banks are responding by raising capital and many are still delivering good returns.
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Banks battle impact of Caribbean economic woes

The Caribbean Community (Caricom) is undergoing what may be its toughest economic cycle in decades, with gross domestic product (GDP) falling across the region, weak fiscal positions, mounting public debt and growing unemployment. In its World Economic Outlook report, the International Monetary Fund says it expects all Caribbean countries, with the exception of the Dominican Republic, Trinidad and Tobago, and the Bahamas, to have public-debt-to-GDP ratios of more than 60%.

Saint Kitts and Nevis and Jamaica have ratios significantly higher than 140%, with Saint Kitts forced to restructure its public debt earlier this year. Meanwhile, due to poor growth, there have been widespread concerns about Belize’s ability to service its $550m ‘super bond’, despite the country’s more comfortable debt-to-GDP ratio, estimated to be just under 80% at the end of 2012.

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Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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