Unmanageable Sovereign Debt
It seems obvious to BU that successive governments have allowed debt levels to rise to unsustainable levels. The key indicators used by the analysts all show that Barbados leads Caribbean and Central American countries as it relates to servicing debt. The IADB report highlighted also shows that rising debt is a problem for almost all Caribbean and Central American countries. We are facing a systemic problem of enormous proportion.
With increasing levels of debt and, in most cases, low growth or weak macroeconomic fundamentals and declining fiscal surpluses, the developing economies of Central America and the Caribbean are becoming more concerned about their ability to adequately service sovereign debt from lower fiscal surpluses with the increasing possibility of sovereign default risk (See Table 2.2, showing average fiscal surplus or deficit over the period studied).