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Structural Constraints and Macroeconomic Policies to Promote Sustainable Growth in the Caribbean

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Since the global economic crisis of 2008/2009, average economic growth
rates in the Caribbean region have remained relatively low and at least two
countries are in recession. The goods-exporting economies, with the
exception of Guyana, have been affected by the decline in commodity
prices, while the service-exporting economies have not attained levels of
growth experienced in the pre-crisis period. It is argued that a
macroeconomic policy aimed at sustainable growth must be informed by
the underlying factors driving debt accumulation and fiscal instability. In
addition, the Caribbean faces the effects of climate change and natural
hazards and therefore adaptation and disaster risk management must be
key strategies to promote sustainable growth. The article does not deny the
need for fiscal restraint but suggests that the challenges are also due to
structural factors and outlines a number of strategies, including the
appropriate policy environment, to address the lack of sustained growth in
the Caribbean.

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