The Organization of Eastern Caribbean States (OECS) comprise a diverse set of small and open economies highly prone to natural disasters, including: Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines. Because of their size, they also tend to specialize in few products and services but cannot benefit from economies of scale. These countries rely extensively on tourism and to a lesser extent agriculture, but do not have a diversified enough market for their products and services, and as a result, are subject to excessive volatility.
The impact of the 2008 global financial crisis was severe as tourism, remittances, and financial activity decreased sharply, growth rates plummeted, debt and fiscal imbalances increased to high levels, and labor market conditions deteriorated. Despite high human development indices, OECS countries have not succeeded in reducing poverty to levels compatible with their level of income per capita. The official poverty rates vary from 18 percent in Antigua and Barbuda to 38 percent in Grenada, between 2005 and 2008. Evidence also shows that female-headed households, which account for two-thirds of all households in the sub-region, are more likely to be poor.
Unemployment, especially among women and youth, remains high. On the other hand, tourism activity showed a steady recovery in most countries, bolstered by a strengthening US economy. Tourist arrivals to the OECS rose by 14 percent in the last quarter of 2014 and 7.4 percent in the first quarter of 2015, reflecting increased arrivals by air from the USA, the UK and Canada.
The forecast for growth in 2016 is positive for the region, based on the improving performance of key sectors such as tourism, construction and agriculture, as well as low fuel prices. Average growth for the OECS is expected to accelerate over the medium term, approximating 2.5 percent.
Last Updated: Mar 28, 2016