6 percent of gdp can be met from excess liquidity of financial institutions, over and above the demand they encounter for private sector credit. domestic financial institutions continue to roll over maturing government local currency 4 obligations, in the absence of other low risk options with adequate rates of return. in sum, the barbados economy is on the right path. we know from experience that sustainable growth is not an overnight phenomenon. growth may be slow in coming, but when it arrives it will persist, because it will be soundly based on the things we do best. in the meanwhile, we will do all that is necessary to keep the economy steady as we go. bis central bankers ’ speeches

and natural disasters. the recent global financial crisis is but the latest of these exogenous factors that has had a profound impact on regional economies which are yet to recover sufficiently to achieve pre - crisis growth levels. in the early stage of the post - crisis period, growth was driven by the commodity - based producers but, over the last three years, activity in the service - based economies has exceeded, if only modestly, that in commodity producers as commodity prices have weakened. to put this in perspective, while the average growth for the region recovered to 1. 7 % in 2014, regional output declined by 0. 7 % in 2016 due to the weak performance of commodity - based economies. forecasts for 2017 and 2018 are for a moderate recovery as the world economic outlook remains positive and the regional economic outturn continues to be driven by international economic developments. however, the regional underperformance suggests that that economic growth cannot be linked solely to activity in our main trade partners. rather it reflects the impact of the structural factors identified earlier as well as the slow adaptation to the changing global environment. of particular note is that the region as a whole ranks in the bottom half of most of the world bank ’ s ease of doing business indicators. this is a source of concern as foreign investment is a vital element of regional growth strategies. notwithstanding the exogenous shocks which these economies face, it is increasingly clear that a sound macroeconomic framework is a prerequisite for sustainable growth. at the same time, structural weaknesses often undermine resilience and compromise the buffers necessary to cope with economic shocks. several regional economies face chronic external current account imbalances which are funded by a combination of foreign direct investment, public sector borrowing and the depletion of international reserves. persistent fiscal deficits resulting from deliberate fiscal strategies or the inadvertent outcomes resulting from economic or natural shocks have led to the significant build - up of sovereign debt in several jurisdictions. these trends tend to place pressure on foreign exchange holdings in fixed rate countries and exchange rates in floating rate economies and have forced several regional governments to embark on adjustment programmes designed to address these imbalances of large deficits and high debt ratios. fiscal space to use countercyclical policies have been eroded as high interest costs have resulted in the need for large primary surpluses in some countries in order to restore balance to the public finances. it is in this context that i refer to the barbadian experience. the barbadian economy has encountered