TOURISM WILL HELP Caribbean economies grow this year.
That’s the prediction of the World Bank in its new report Global Economic Prospects: A Fragile Recovery.
“Strengthening tourism demand underlies an expected acceleration in growth to 3.3 per cent in the Caribbean,” said the forecast.
It added that overall the economies of Latin America and the Caribbean are expected to “strengthen” this year after a difficult 2016.
The financial institution said “regional output contracted 1.4 per cent in 2016, pulled down by recessions in Argentina, Brazil, and Venezuela”.
However, it added: “growth in Latin America and the Caribbean is projected to strengthen to 0.8 per cent in 2017, as Argentina and Brazil emerge from recessions”.
“In the Caribbean, the deceleration in 2016 reflected a modest slowdown in the Dominican Republic, the largest economy in the region, on the completion of construction projects and weakening manufacturing growth. Contraction in several commodity-exporting countries (Belize, Suriname, Trinidad and Tobago) also contributed to the deceleration,” the report stated.
“Although recent data suggest that the regional economy is stabilizing after two years of contraction, the recovery is expected to be subdued in the short term. Growth is projected to reach 0.8 per cent in 2017, supported by strengthening private consumption and an easing contraction in investment, despite a slowdown in Mexico as uncertainty about [United States] economic policy dents confidence.
“Regional growth is expected to accelerate to an average of 2.3 per cent in 2018-19, as the recoveries in Brazil and other commodity exporters advance. The main downside risks to the outlook arise from domestic political and policy uncertainty and from possible policy changes in the United States.”
The World Bank also said “a growth recovery in commodity exporters in the region will be offset to some extent by easing growth in Mexico”.
“The pace of the regional recovery is projected to be slower than forecasted in the January Global Economic Prospects as a result of a more protracted adjustment to previous commodity price declines and continued policy uncertainty,” it noted. (SC)