Small growth expected
Yet another international agency is predicting Barbados’ economic performance this year will be nothing to shout about.
With Central Bank of Barbados Governor, Dr DeLisle Worrell scheduled to report this week on the economy’s performance up to the end of March, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), said the island’s growth domestic product would be marginally above one per cent – effectively below the 2.1 per cent average for the region.
In its updated Economic Overview Of Latin America And The Caribbean 2013 released last week, ECLAC said overall economic growth in the entire Latin American and Caribbean region would be 2.7 per cent.
“St Kitts and Nevis will grow by 3.1 per cent, Bahamas 2.5 per cent, St Vincent and the Grenadines 2.3 per cent and Trinidad and Tobago 2.1 per cent, the same figure projected for the whole group of Caribbean countries,” the report said.
“The economic upturn in the United States will benefit the economies closest by, especially Mexico and the Central American countries, as the United States is such an important trading partner for them. “Caribbean economies specialising in services exports will benefit from the upswing in the developed economies, through the rally in the tourism sector, which caters mainly to tourists from those economies.
“Conversely, the natural resource producers and exporters in South America will feel the effects of lower growth in China, which will weaken demand for their commodities.”
ECLAC said given the external context for this year, growth in the region “will not rise much above the 2013 figure and will likely reach 2.7 per cent – down from the 3.2 per cent forecast at the end of 2013”.
“Contributing to this lower regional growth projection was the fact that, in some countries, disequilibria that had become evident in recent years worsened in the course of 2013, and adjustments became increasingly necessary,” it explained.
“This was particularly the case in Argentina and the Bolivarian Republic of Venezuela. Early in the year Argentina devalued its currency sharply and increased interest rates, measures which are bound to dampen economic activity in the short term. In the Bolivarian Republic of Venezuela, economic activity is restrained by the shortage of foreign exchange, among other factors.”
The organisation also said Barbados and other countries in the region would be impacted by “a global scenario with lower liquidity, which entails important challenges in matters of macroeconomic policy and external financing”.
“Panama, Bolivia, Peru, Ecuador, Nicaragua and the Dominican Republic will have growth figures equal or higher than five per cent, while a significant number of nations will register expansion of between three per cent and five per cent.”
ECLAC also said that activity indicators for developed countries – especially the United States, United Kingdom, Korea, Germany and several others from the euro zone – have shown a recovery, adding there was caution “on the situation in China, one of the region’s main trade partners, which set a minimum growth goal of seven per cent for this year”. (SC)