‘Projected growth for region still inadequate’

The nine per cent growth forecast for Caribbean countries has been described as “subpar” and “inadequate” by President of the Caribbean Development Bank (CDB) Dr Hyginus Gene Leon.

Speaking during the CDB’s annual news conference on Tuesday morning, he maintained that the predicted growth was simply not enough, even though countries were still recovering from the economic fallout caused by the COVID-19 pandemic.

The CDB has projected 9.1 per cent gross domestic product (GDP) growth across its 19 borrowing member countries (BMCs), anchored by an expected surge in the GDP of commodity-exporting economies by an estimated 17.5 per cent.

However, Dr Leon said that paled in comparison to other countries in the world.

“The growth is subpar in two dimensions. First, it is not adequate relative to the extent of the fall that we have had in 2019, 2020, 2021, and when I say it is subpar I think I said it remains subpar. We need to do more than what we have done.

“Having said that, yes, we have what we called nascent recovery that hasn’t gotten us back to where we were before the pandemic, but we have recovery. It is actually emerging and, therefore, we need to welcome that but we need to do a lot more,” Dr Leon said.

“Second, it’s equally subpar if we compare it with other Latin America and other developing countries where the rates of growth of that recovery are actually much, much more than what we have in the region. So, the message is not a conflicting message; it is welcoming growth that we have now but recognising that growth is simply not yet enough for where we need to be even to recover where we were before the pandemic started.”

Earlier, CDB’s Director of Economics Ian Durant said the combination of easing border controls and internal lockdown measures, and the continued implementation of fiscal stimulus programmes had helped regional countries recover some of the lost ground in economic activity.

He said that in 2021, the economies of the Bank’s BMCs were estimated to have grown by three per cent.

“Prospects for regional growth in 2022 are favourable, with growth projected to increase to approximately 9.1 per cent. The projected outturn is dominated by Guyana which is expected to grow by 47.5 per cent as output in the oil and gas sector continues to build momentum,” Durant said.

He said service exporting economies were “forecasted to gain momentum, growing at an average of 4.8 per cent with the growing recovery of the tourism sector”.

Last year, the CDB reported that service-exporting economies expanded by 3.2 per cent, which was due to a rebound in two sectors – hotels and restaurants, and wholesale and retail trade –, buoyed by an almost 10 per cent increase in tourist arrivals between January and September, compared with the same period in 2020.

Belize recorded growth of 10.9 per cent while St Lucia’s economy grew by 6.8 per cent. The economies of Grenada and Antigua and Barbuda advanced by 4.8 per cent and 4.7 per cent, respectively, while The Bahamas gained 3.1 per cent and Barbados grew by 1.4 per cent, according to the CDB.

Conversely, GDP in Trinidad and Tobago contracted by 2.9 per cent, due to lower natural gas production with effects on downstream industries, along with mandated closures in the service sector. Similarly, in Suriname Gross Domestic Product (GDP) declined by 3.5 per cent as the ongoing fiscal, economic and health crisis continued to weigh heavily on economic growth.

Durant noted that sustaining the growth of tourist arrivals would depend heavily on increasing vaccination rates, effective management of the pandemic without resorting to full and lengthy lockdowns, and source markets’ continued confidence in the protocols established for safe travel to the region.

Director of Projects at the CDB Daniel Best disclosed that in 2021, the Barbados-headquartered institution approved US$72.1 million in loans and US$51.4 million in grants to all BMCs.

In total, he said the Bank had dispersed $185 million and $76.1 million in loans and grants, respectively.
randybennett@barbadostoday.bb