External Accounts On A Knife Edge

Montserrat's balance of payments accounts dynamics will continue to put downward pressure on the country's foreign reserves pile, causing it to remain heavily reliant on external financing, which in turn is dropping off as the UK, Montserrat's major donor, faces domestic fiscal problems. Persistent current account deficits are set to continue as import costs rise, while financial account inflows will likely remain subdued due to the lack of investment opportunities on the island.

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