(CMC) The International Monetary Fund (IMF) on Friday said economic prospects for the Caribbean are generally improving and that growth in the tourism dependent economies in 2017-18 is projected to be 2.4 per cent, up from 2.1 per cent last year.
In a report titled “Latin America and the Caribbean — Stuck in low gear” the Washington-based financial institution said that the baseline projections reflect data available before the impact of Hurricanes Harvey, Irma, and Maria, which hit the Caribbean recently.
It said that the data do not, therefore, reflect the devastating impact of these hurricanes on a number of countries in the region and the risk they pose to their growth outlook, at least in the short term.
But in the report, the IMF noted that for commodity exporters, growth is projected to rise in 2017–18 to 1.3 per cent, from –3.3 per cent in 2016.
“There is, however, substantial variation across countries. Economic activity in tourism-dependent economies is estimated to have expanded in the first half of 2017. There are a few exceptions, however, such as Barbados, where growth in 2017 is estimated to have slowed, reflecting necessary fiscal consolidation efforts,” the IMF said.
It said that in a number of cases, weather swings and hurricanes are expected to take a toll on overall growth this year, including in Antigua and Barbuda, Dominica, St Kitts and Nevis, and Haiti, which is still rebuilding from the effects of Hurricane Matthew in October 2016.
The financial institution in its Regional Economic Outlook report noted that slightly faster growth is projected for 2018, based on the acceleration in global demand, as well as country-specific factors, such as the expected entry into full operation of a new international airport in St Vincent and the Grenadines.
It said reconstruction activity following the hurricanes could have a positive impact on growth in subsequent years beyond what is projected in the baseline.
“The performance of commodity exporters has generally been weaker. Trinidad and Tobago was hit hard by lower oil and gas prices and production outages in 2014–15, and Suriname by lower commodity prices, the shutdown of alumina production, and necessary fiscal consolidation.
“The downturn in these economies is estimated to have extended into 2017, and positive growth is projected for 2018,” the IMF said, noting that growth has been stronger in Guyana, supported by two new large gold mines and positive sentiment ahead of the beginning of oil production in 2020.
The IMF said that a number of Caribbean economies have made inroads into reducing their debt burden, but the majority face high and, in some cases, rising sovereign debt levels that weigh on their prospects for strong and sustainable growth.