CDB projects 5.7% growth for Caribbean

CARIBBEAN COUNTRIES averaged growth of 10.3 per cent last year, compared to 4.5 per cent in 2021, the Caribbean Development Bank reported on Wednesday.

Its forecast for this year is growth of 5.7 per cent.

CDB Vice-president of Operations Isaac Solomon said at the bank’s annual news conference that regional growth was largely underpinned by increased energy production in Guyana and Trinidad & Tobago and higher international oil prices, fuelling much of the 20.6 per cent economic growth in commodity-exporting member countries of the CDB.

In the tourism-dependent countries, increases in extra-regional airlift also resulted in a strong, though incomplete, recovery amid rising inflation that dampened domestic demand and moderated growth in key economic sectors, Solomon said. This outturn helped buoy economic growth of 4.6 per cent, with increased government revenues and improved fiscal positions.

Looking ahead, the CDB is projecting that in 2023, despite facing multiple challenges, regional economic performance will continue to improve over the medium term.

“While cautiously optimistic about the near-term outlook and recognising the uncertainty regarding the war in Ukraine, it is difficult to estimate growth with a large degree of certainty,” it said.

The 5.7 per cent regional growth forecast by the CDB for 2023 is anchored on the continued resuscitation of the tourism sector and energy investments.

“This forecast, however, is subject to some downside risks, since most advanced economies are on track to register lower growth relative to 2022, increasing the likelihood of a global recession. When coupled with continued, albeit lower inflation, this slowdown in economic activity could trigger stagflation,” Solomon said.

The CDB official said access to food remains a major concern and that food security threatens the region, especially the poor, for whom food and fuel represent a large share of their consumption basket.

As such, Solomon said the bank welcomes and supports an initiative of Caricom heads of government to reduce the estimated Us$5-billion regional food import bill by 25 per cent by 2025.

“We also continue to invest in climate-resilient agriculture production and marketing systems” in several CDB member countries, Solomon added.