The International Monetary Fund (IMF) says growth in Latin America and the Caribbean (LAC) is slowing down and that the region is expected to record a 0.2 per cent growth this year.
The Washington-based financial institution said that the low growth comes amid continued trade tensions, lower global growth, subdued commodity prices, and in some large regional economies, high policy uncertainty.
In its latest Regional Economic Outlook for the Western Hemisphere, the IMF says in order to boost the economic recovery and create more jobs, the region will need to rely on domestic drivers of growth, like consumption and investment.
“Jamaica’s steadfast reform implementation resulted in many milestones, including reducing public debt by 50 percentage points of GDP (gross domestic product) since 2013 to below 95 per cent of GDP and hitting an all-time low unemployment rate of 7.8 per cent.”– Director of the Western Hemisphere Department of the IMF, Alejandro Werner
In reviewing the economic performances of the Caribbean countries, the IMF noted that Guyana is projected to record economic growth of 4.4 per cent this year, up from 4.1 per cent last year, while Suriname will record marginal growth of 2.2 per cent, up from two per cent in 2018.
The IMF is predicting that Belize will record negative growth, moving to 2.7 per cent from three per cent last year, while Antigua and Barbuda will see economic growth decline from seven per cent last year to four per cent this year.
The Bahamas, hit by a Category 5 hurricane in September will also record a decline in economic growth from 1.6 per cent last year to 0.9 per cent in 2019, while Barbados, which had a negative 0.6 per cent growth in 2018 will register a minus 0.1 per cent growth this year.
The IMF said Dominica will be among Caribbean countries recording a high economic growth this year of 9.4 per cent, up from 0.5 per cent last year, while Grenada’s economic growth will drop from 4.2 per cent last year to 3.1 per cent in 2019.
Haiti, where opposition parties are staging demonstrations to remove President Jovenel Moise, will record growth of 0.1 per cent, down from 1.5 per cent, while Jamaica, which recently concluded an agreement with the IMF, will record a decline in economic growth from 1.6 per cent last year to 1.1 per cent this year.
The economic growth in St Kitts-Nevis is estimated at 3.5 per cent this year, down from 4.6 per cent the previous year, while St Lucia will show an improvement in its economic growth, rising from 0.9 per cent last year to 1.6 per cent.
St Vincent and the Grenadines will also record a slight increase in growth, moving from two per cent to 2.3 per cent this year, while Trinidad and Tobago will record no economic growth this year, down from the 0.3 per cent the previous year.
Director of the Western Hemisphere Department of the International Monetary Fund (IMF), Alejandro Werner, commenting on Jamaica successfully concluded its IMF-supported programme, said there were lessons to be learned from that experience.
“Jamaica’s steadfast reform implementation resulted in many milestones, including reducing public debt by 50 percentage points of GDP (gross domestic product) since 2013 to below 95 per cent of GDP and hitting an all-time low unemployment rate of 7.8 per cent.”
Werner said a key element for the programme’s success was the establishment of the Economic Programme Oversight Committee, which saw ownership from the local society, including different stakeholders and political parties, as well as consistent communication to keep the public informed, and carry the reforms through. From ownership grew commitment to deliver on all their promises, quite an impressive performance.
“Another important lesson for other countries is the benefit of phasing in difficult reforms. For instance, the switch from direct to indirect taxes was phased in over two years, while the increase in pension contributions from public employees and the central bank recapitalization were phased in over three years,” he said.