ECCB 2020-2021 Annual Report and Statement of Accounts

FISCAL AND DEBT SUSTAINABILITY

Provide policy advice to Participating Governments and facilitate capacity building of member countries for effective debt management The financial year under review marks one where the Bank contributed significantly to, inter alia, the provision of policy advice to member governments. The objective in question was fulfilled through a number of policy pieces, weekly updates and the economic reviews. Two reviews were completed: a Bi-annual Economic and Financial Review (January to June 2020) and an Annual Economic and Financial Review (January to December 2020). These reports primarily addressed the economic and financial wellbeing of both individual member countries and the ECCU as a whole. The Bank developed: A Programme of Action for Recovery, Resilience and Transformation of the ECCU , which is the foundation for guiding the region for the next three years as it implements policy measures to recover from the devastating effects of the pandemic on the economies of the ECCU. The policy work completed this year covered a number of thematic areas and pieces driven by the request of the Monetary Council, largely in the context of the adverse impact of the COVID-19 pandemic on the economies of the ECCU. The Bank, in the fulfilment of its mandate, advised on the time for the tourism industry to recovery, given the adverse impact of lockdowns in major source markets and other measures implemented as a result of the pandemic. Policy advice was presented in the area of fiscal and debt management, which involved undertaking debt sustainability analysis for all member countries and presenting options for the revision of the fiscal anchor (Debt to GDP Ratio of 60.0 per cent by 2030). Other areas where policy briefs were prepared included: Trends and Strategies for the Tourism Industry, Growth and Development, Food Security, Nutrition and Agriculture, Health Care Financing, Labour Market Developments and Sustainable Energy. Technical Assistance to Debt Management Offices Amidst challenges related to the pandemic, the Bank continued to collaborate with the Commonwealth Secretariat to implement the debt software tool, The Commonwealth Meridian. Saint Lucia and Saint Christopher (St Kitts) and Nevis were the two pilot countries which launched in June 2019. Saint Lucia completed the implementation of The Commonwealth Meridian and went live on 1 April 2020. The Commonwealth Meridian implementation stalled in Saint Christopher (St Kitts) and Nevis. The implementation process started in Anguilla in October 2020 and is currently ongoing. Provide Recommendations And Shape Regional Consensus To Facilitate The Achievement Of A Primary Surplus And Improve The Collective Fiscal Health Of The Eccu During the year, the Bank conducted thorough fiscal and debt sustainability analyses to carefully examine the feasibility of achieving the Monetary Council’s fiscal anchor - Debt to GDP Ratio of 60.0 per cent by 2030. The research was undertaken in the context of the adverse impact that the COVID-19 pandemic was having on the economies of the ECCU. The analyses indicated that four of the eight member countries are not likely to meet the target based on a baseline scenario. Alternative scenarios indicated that to do so, significant fiscal adjustments would

Programme of Action for Recovery, Resilience and Transformation of the ECCU

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EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 14