Working Paper Series: Special Edition of 2016 to 2018 Interns

Table 5: Natural Disaster Scenario with Baseline Primary Surplus

AXA

ATG 2.0%

DOM 0.6%

GDA 1.4%

MON

SKN

SLU

SVG

Primary Surplus N/A

N/A

0.81% 1.01% 1.35% 67.7% 63.8% 65.5%

N/A N/A

68.2% 63.9% 64.2% N/A

Debt by 2030

2033

2033

2032

N/A

-

2033

2032

Year debt will be 60%

Additionally, Grenada and St. Vincent and the Grenadines would likely be the first countries to meet the debt target, but not until 2032, with Antigua and Barbuda, Dominica and Saint Lucia achieving the target by 2033. Accordingly, member countries would be required to generate even larger primary surpluses in order to achieve the debt target by the agreed date. In the third scenario, the growth shock remains the same as per scenario two, but the important difference is that primary balances are allowed to adjust in order to arrive at the debt target by 2030. A shown in Table 6 , each country would be required to further increase their fiscal effort in order to achieve the 60.0 per cent debt target by 2030, with the revised primary surpluses ranging from 0.9 per cent (Dominica) to 2.6 per cent (Antigua and Barbuda) of GDP. Given the current fiscal constraints of ECCU member countries and their historical performances, some governments may find it extremely difficult to generate the required fiscal surpluses on a sustained basis. However, St Kitts and Nevis may be able to generate the required surplus regularly given their history of running primary surpluses. Table 6: Natural Disaster Scenario with Primary Surplus Adjusted to meet 60 Per Cent Target

AXA N/A

ATG 2.6%

DOM 0.9%

GDA 1.8%

MON

SKN

SLU

SVG

N/A

1.35% 1.23% 1.76%

Primary Surplus required

N/A

60%

60%

60%

N/A

60%

60%

60%

Debt by 2030

167