A Debt Intolerance Framework Applied to Central America, Panama and the Dominican Republic

A Debt Intolerance Framework Applied to Central America, Panama and the Dominican Republic
Author: Mr.Geoffrey J. Bannister
Publisher: International Monetary Fund
Total Pages: 25
Release: 2011-09-01
Genre: Business & Economics
ISBN: 1463904223
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This paper presents an alternative method for calculating debt targets using the debt intolerance literature of Reinhart, Rogoff, and Savastano (2003) and Reinhart and Rogoff (2009). The methodology presented improves on the previous papers by using a dynamic panel approach, correcting for endogeneity in the regressors and basing the calculation of debt targets on credit ratings, a more objective criteria. In addition the study uses a new data base on general government debt covering 120 countries over 21 years. The paper suggests a ranking of Central America, Panama, and Dominican Republic (CAPDR) countries in terms of debt intolerance - an index which could be used to further investigate the main components of debt intolerance.

Debt and Credit Quality in Central America, Panama, and the Dominican Republic

Debt and Credit Quality in Central America, Panama, and the Dominican Republic
Author: Guillermo Lagarda
Publisher:
Total Pages: 29
Release: 2016
Genre:
ISBN:
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Credit quality has long been associated with the level of indebtedness. But the sole fact that there are countries with high creditworthiness and large stocks of debt suggests that indebtedness is just one of many factors which determine credit quality. In this paper we investigate the role that economic fundamentals have on risk perception of public debt, through both direct and indirect effects. Countries are grouped into four clusters, each corresponding to a different stage of development in their economic fundamentals. We find that the effect of the debt burden on credit quality is conditional on the current level of economic fundamentals and the degree to which they are improving. A transition to stronger fundamentals would require moving to a better cluster but would ease pressure on any debt adjustment necessary to improve creditworthiness. Consequently, there are two types of approaches countries in CAPDR could focus on to improve credit quality. On the one hand, there are a set of actions which could be carried out in the short run to move within a particular group or cluster-fiscal toolkit. On the other hand, there are actions, which in the medium term may enable a country to transition to a group with better credit perception-structural changes.

Public Debt Markets in Central America, Panama, and the Dominican Republic

Public Debt Markets in Central America, Panama, and the Dominican Republic
Author: Laura Valderrama
Publisher: INTERNATIONAL MONETARY FUND
Total Pages: 150
Release: 2007-06-01
Genre:
ISBN: 9781451867114
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This paper-consisting of a regional study and seven country studies-reviews the state of domestic public debt markets in Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Panama as at end-2005. Although they account for the lion's share of capital markets, regional public debt markets remain underdeveloped for a variety of reasons. The problems of small scale, dollarization, and weak public finances in many countries are compounded by poor structure and composition of debt (with sizeable nonstandard and non-tradable components), fragmentation of public debt between central banks and the sovereigns and across instruments, poor debt management practices, weaknesses in securities market, and small investor bases all of which result in high transaction costs and a lack of liquid benchmarks. The paper also briefly discusses efforts towards and impediments to regional integration of public debt markets. The authorities recognize these problems and the paper takes note of the regional efforts to harmonize debt standards and improve issuance practices. It offers several recommendations to improve strategic debt management, issuance mechanics, and secondary trading.

Paving the Way to Sustained Growth and Prosperity in Central America, Panama, and the Dominican Republic

Paving the Way to Sustained Growth and Prosperity in Central America, Panama, and the Dominican Republic
Author: Ms.Kimberly Beaton
Publisher: International Monetary Fund
Total Pages: 308
Release: 2019-09-13
Genre: Business & Economics
ISBN: 1484370287
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Abstract: Accelerating economic growth in Central America, Panama and the Dominican Republic (CAPDR) remains an elusive task. While the region performed relatively well in the post-global financial crisis period, over the last five years obstacles to growth have become more evident and new challenges have emerged. In response, the region has strengthened macro-financial frameworks but more progress will be required to pave the way to sustained growth and prosperity. This book considers the structural factors underlying the region’s growth outlook and assesses its macroeconomic and financial challenges to help shape the policy agenda going forward. The book first identifies the structural determinants of growth in the region related to: capital formation; employment; demographic factors, including immigration; productivity; and violence. It then highlights the importance of creating fiscal space through the design and implementation of fiscal rules and mechanisms to increase accountability (better quality of public spending, adequate policies to reduce income inequality and sustainable retirement plans). Finally, it presents recent evidence on the importance of a supportive financial sector for growth (including through financial inclusion and development).

Central America, Panama, and the Dominican Republic

Central America, Panama, and the Dominican Republic
Author: Mr.Marco Pinon
Publisher: International Monetary Fund
Total Pages: 280
Release: 2012-06-28
Genre: Business & Economics
ISBN: 1475572018
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Central America, Panama, and the Dominican Republic coped well with the global financial crisis of 2008-09. The impact was generally less severe and shorter lived than in previous episodes, the balance of payments adjustment was orderly, and the stability of the financial system was not compromised. This resilience can be attributed to a large extent to the strengthening of the fiscal frameworks, monetary management, and financial reforms conducted in the years preceding the global crisis. Nevertheless, the region faces considerable challenges for the period ahead, including the need to raise medium term growth above historical levels and protect macroeconomic and financial stability. This book argues that meeting these challenges will have to come from within, in light of the anticipated modest demand growth from trade partners. Raising growth in the region will depend on the adoption of structural reforms that generate substantial productivity gains. Rebuilding fiscal space and securing debt sustainability will hinge on efforts to increase tax revenue and reorienting spending to social and investment priorities. In the non-officially dollarized economies, it will also be essential to strengthen the monetary policy frameworks to keep inflation low and increase exchange rate flexibility, and improve financial regulation and supervision.

Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic

Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic
Author:
Publisher:
Total Pages: 136
Release: 2007
Genre: Capital market
ISBN:
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This study focuses on equity, private debt, and asset-backed securities markets in Central America. These markets are generally under-developed throughout the region due to several structural problems, economic and political factors, and weaknesses in regulation and in institutional investor base. The paper identifies key country-specific recommendations to strengthen securities laws, regulatory oversight, market infrastructure, investor base, and new products such as asset-backed securities. Despite these efforts, developing seven viable private capital markets is a difficult goal. The paper thus also explores the benefits and difficulties of creating a single capital market in a region still short of full economic integration.

Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic

Equity and Private Debt Markets in Central America, Panama, and the Dominican Republic
Author: Hemant Shah
Publisher: INTERNATIONAL MONETARY FUND
Total Pages: 130
Release: 2007-12-01
Genre:
ISBN: 9781451868517
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This study focuses on equity, private debt, and asset-backed securities markets in Central America. These markets are generally under-developed throughout the region due to several structural problems, economic and political factors, and weaknesses in regulation and in institutional investor base. The paper identifies key country-specific recommendations to strengthen securities laws, regulatory oversight, market infrastructure, investor base, and new products such as asset-backed securities. Despite these efforts, developing seven viable private capital markets is a difficult goal. The paper thus also explores the benefits and difficulties of creating a single capital market in a region still short of full economic integration.

Excerpt: Paving the Way to Sustained Growth and Prosperity in Central America, Panama, and the Dominican Republic

Excerpt: Paving the Way to Sustained Growth and Prosperity in Central America, Panama, and the Dominican Republic
Author: International Monetary Fund. Western Hemisphere Dept.
Publisher: International Monetary Fund
Total Pages: 20
Release: 2018-07-23
Genre: Business & Economics
ISBN: 1484370317
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This is an excerpt from Paving the Way to Growth and Prosperity in Central America, Panama, and the Dominican Republic edited by Kimberly Beaton, Roberto Garcia Saltos, and Lorenzo Figliuoli. Over the past three decades, countries in Central America, Panama, and the Dominican Republic have experienced sustained economic transfor-mation. The region has moved away from its rural and agricultural past to a modern and urban present and has significantly integrated its econ-omies regionally and globally. Many factors have shaped the region’s economic performance and are expected to contribute to its future development. The book aims to foster policy dialogue and contribute to the efforts to address the region’s unique challenges. The first part looks at the region’s growth with a view to understanding how structural determinants have contributed to the region’s uneven gains and the resulting priorities to strengthen the foundations of growth. The second part of the book high-lights the importance of addressing the region’s fiscal challenges and supporting growth and improved social outcomes. Finally, the third part of the book emphasizes the importance of a supportive financial sector for growth, including through financial inclusion and development. This excerpt is taken from uncorrected page proofs. Please check quota-tions and attributions against the final published volume.

Central America, Panama, and the Dominican Republic

Central America, Panama, and the Dominican Republic
Author: Stephanie Medina Cas
Publisher: International Monetary Fund
Total Pages: 40
Release: 2012-09-27
Genre: Business & Economics
ISBN: 1475510845
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This paper studies the potential for the export sector to play a more important role in promoting growth in Central America, Panama, and the Dominican Republic (CAPDR) through deeper intra-regional and global trade integration. CAPDR countries have enacted many free trade agreements and other regional integration initiatives in recent years, but this paper finds that their exports remain below the norm for countries of their size. Several indexes of outward orientation are constructed and suggest that the breadth of geographic trading relationships, depth of integration into global production chains, and degree of technological sophistication of exports in CAPDR are less conducive to higher exports and growth than in fast-growing, export-oriented economies. To boost exports and growth, CAPDR should implement policies to facilitate economic integration, particularly building a customs union, harmonizing trade rules, improving logistics and infrastructure, and enhancing regional cordination.

Inclusive Growth

Inclusive Growth
Author: Jordi Prat
Publisher: Inter-American Development Bank
Total Pages: 86
Release: 2018-02-22
Genre: Business & Economics
ISBN:
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Central America and the Dominican Republic had stable economic growth in 2017. The performance of the United States economy and low commodity prices, mainly oil, meant that the key indicators for the region did not change abruptly. It is worth noting that safeguarding the stability of public finances remains the main challenge for the region. In the short run, we expect the fiscal deficit and public debt to maintain their upward trend, thus putting pressure on interest rates, which would have a negative impact on economic growth. This trend has implied in downward revisions to the region’s economic outlook. Growth in the region has been higher than the rest of Latin America, but its impact on reducing poverty and improve income distribution, has been limited. The report explores options to make growth more inclusive in Central America and the Dominican Republic. It highlights the need to bolster human capital accumulation, take advantage of integration with other trade partners, and generate buffers for political decision-making in a highly uncertain environment, in order ensure that growth can benefit the highest number of people in the region.