IDB report provides policy recommendations for Caribbean to better cope with coronavirus

The economic and financial implications of the coronavirus crisis on the Caribbean is the focus of the newly released Caribbean Quarterly Bulletin of the Inter-American Development Bank (IDB). The report assesses the economic impacts of the virus on key sectors including trade and tourism, reviews policies being undertaken by governments in the region, and provides recommendations on further efforts policymakers should take in order to mitigate the economic fallout of the crisis.

The report notes that the crisis is unprecedented, and that its economic impact is likely to be severe for The Bahamas, Barbados, Guyana, Jamaica, Suriname and Trinidad & Tobago – IDB member-countries covered in the Quarterly Bulletin.

The report also presents newly developed data, and uses scenarios to highlight the potential magnitude of economic shocks to Caribbean countries. It also explores various transmission channels thorough which the crisis will impact economies in the region, and highlights some of the most important vulnerabilities that policymakers will have to focus on when developing their response packages.

It recommends governments in the region take immediate action to contain both the virus itself, and its economic impacts via prudent use of the full spectrum of policy measures available to them.

According to the report, measures to flatten the curve are essential to “keep the human capital stock healthy, for when the crisis is over.” The study also says that given limited fiscal space and the importance of safeguarding long-term debt sustainability, policy measures should be “targeted and temporary.”

General Manager for the IDB’s Country Department Caribbean (CCB) Therese Tuner- Jones says the special edition of the Quarterly Bulletin is another way the IDB is supporting the region in this crisis. She says, “This pandemic has generated an unprecedented wave of economic shocks for the Caribbean. Our role as the leading multilateral partner is to provide as much support as possible. We are working with governments in the region to respond quickly and deploy all available resources. Our team is also responding with comprehensive analysis of the effect on our economies. In this latest edition of our Caribbean Quarterly Bulletin we use existing data to explore different shock scenarios for the region as well as specific implications for all of our member countries.”