2013-09-16 08:51:15 - New Country Reports market report from Business Monitor International: "East Caribbean Business Forecast Report Q4 2013"
BMI Ratings - Brief Methodology
The composite rating is an unweighted geometric mean of the short-term political and short-term economy ratings, allowing a ranking of all countries in BMI's emerging markets universe.
The political ratings are an indicator of political stability, seen as a pre-requisite for a stable economy and business environment. The long-term political rating considers more structural elements such as: Is there a functioning democracy? Are there free and fair elections? Is there separation between party and state? Have recent governments pursued similar, enlightened policies amid a stable political environment? The short-term political rating considers more transient influences such as: Have there been recent large-scale demonstrations or strikes? To what extent have these threatened the political status quo?
Is unemployment currently a potential source of political instability? What is the current position in the political cycle - to what extent is this contributing to political risk? Is the government having trouble passing legislation?
Full Report Details at
- www.fastmr.com/prod/673204_east_caribbean_business_forecast_repo ..
The economy ratings assess the degree to which the country approximates the ideal of non-inflationary growth with contained fiscal and external deficits and manageable debt ratios. The ratings use as raw material historical data and forecasts fed in from BMI's country databases: as historical data are revised and forecasts change, so the ratings change. Factors in the long-term rating include GDP growth, unemployment, inflation, real interest rates, exchange rates, the fiscal balance, the current account balance and external debt. A number of other structural factors are also thrown into the equation, including dependence on the primary sector, reliance on commodity imports, reliance on a single export sector and central bank independence. The factors included in the short-term rating are a subset of those in the long-term rating.
Business Environment Rating
The business environment rating is a broad indicator of the investment climate, for both domestic and foreign players. While areas such as competitiveness, finance, openness and environment comprise the bulk of the rating, there is also an important feed from the political and economy ratings. The factors considered include: the state of the national infrastructure, the education system, cronyism/ corruption, red tape, the legal framework, property rights, market access and the corporate tax regime.
Partial Table of Contents:
BMI Risk Ratings - Barbados
BMI Risk Ratings - Guyana
BMI Risk Ratings - Trinidad & Tobago
BMI Ratings - East Caribbean Table
Major Forecast Changes
Key Risk To Outlook
Chapter 1.1: Political Outlook - Barbados
Renewables Push Could Reduce Energy Import Bill
- We believe that a recently announced legislative agenda in the Barbadian parliament could jump-starting efficient and renewable energy investment on the island, a move that would stem costly fuel imports, thereby reducing the energy drag on both the country's external accounts as well as real GDP growth.
Chapter 1.2: Economic Outlook - Barbados
Fundamentals Threaten To Send Yields Higher
- We are growing increasingly wary of Barbadian debt, as we believe weak macroeconomic fundamentals could lead to a re-pricing of the country's sovereign risk..
TABLE: ECONOMIC ACTIVITY
Chapter 2.1: Political Outlook - Guyana
External Factors To Continue Feeding Crime And Drug Trafficking
- Guyana will continue to struggle with narcotics trafficking and gang crime in the coming years, spelling little upside for the country's scores in our Short-Term Political Risk and Business Environment Ratings.
Chapter 2.2: Economic Outlook - Guyana
Commodity Price Weakness Poses Downside Risks To Forecasts
- Substantial declines in gold and sugar prices in recent months highlight downside risks to our current account forecasts for Guyana this year and next.
TABLE: CURRENT ACCOUNT
Chapter 3.1: Political Outlook - Trinidad & Tobago
Warner's Return To Heighten Political Uncertainty
- We believe that the decision by former Trinidadian National Security Minister Jack Warner to form a new political party will likely prompt defections from the ruling coalition, creating uncertainty over the government's policy trajectory and heightening short-term political risk.
TABLE: POLITICAL OVERVIEW
Chapter 3.2: Economic Outlook - Trinidad & Tobago
Economic Recovery To Continue At Slow Pace
- Trinidad & Tobago will see stronger economic growth in 2013 and 2014 on the back of a rise in non-energy output, and increasing household and government consumption. Moreover, although the energy sector will be held back by ongoing maintenance delays, we expect growth to remain in positive territory, bolstering the ongoing economic recovery. That said, stagnating production of oil and gas over the long term will prevent growth from rapidly accelerating through 2017.
TABLE: MACROECONOMIC INDICATORS
Chapter 4: Regional
Exchange Rate Policy
Rising Risks To Exchange Rate Regimes
- Precarious external positions pose substantial risks to existing exchange rate regimes in much of the Caribbean region over the medium term. Although most economies have sufficiently large international reserves to maintain US dollar pegs for now, we caution that future debt restructurings could see a decline in capital and financial account flows, which could force the hands of local central banks.
Balance Of Payments
Full Table of Contents is available at:
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