World Bank economist says Caribbean economies have yet to recover in pre-COVID era
A senior World Bank official says the Caribbean’s gross domestic product (GDP) has yet to recover to 2019 levels as the region emerges from one of the regions hardest hit by the coronavirus (COVID) pandemic. -19).
“We don’t expect that to be the case until 2024 and that reflects the overall slow recovery in the region. Part of that is that we know that many islands are dependent on tourism and we have struggled to bring COVID under control,” said William Maloney, World Bank Chief Economist for Latin America and the Caribbean.
He told reporters that many countries in the region were still recording low vaccination rates against the virus that has killed and infected millions around the world.
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He said most were below 40% “which makes us vulnerable to any new variants. It’s important to realize that covid is in a recession right now, but it’s very unpredictable, and we have to be prepared for whatever happens and that means those vaccination rates will have to go up…”
Maloney said the region has also been hit hard by the Ukraine crisis sparked by Russia’s invasion of the Eastern European country since February “because we are net importers of food and fuel, with the possible exception of Trinidad and Tobago, which puts additional pressure on household budgets and public finances.
“So that made the two years very difficult for the Caribbean. The bank has programs, I think, for 19 countries in the region, focusing precisely on issues such as fiscal sustainability, building resilience to natural hazards,” he said.
The chief economist said that in the case of Haiti, the Caribbean Community (CARICOM) country is in a “very difficult situation”.
“They continue to fight multiple crises on multiple fronts. You have gang violence, institutional and persistent political instability and we have persistent vulnerability to natural shocks. Covid of course exacerbated these and unfortunately to date it has a low vaccination rate,” Maloney added.
He further said that the economy continues to contract, adding “we see a decline of 2.5% in 2022 and a decline of 0.1% in 2023.”
“The situation in the short and medium term is therefore not extremely positive. The bank continues to support recovery from the 2021 earthquake by building disaster risk management capacity…and we have also worked hard to address issues of access to quality learning and to mitigate the food insecurity in Haiti,” said the economist.
He said the bank’s portfolio for Haiti has grown by 40% over the past two years “but…it’s still a very difficult situation.”
He said some Caribbean countries will see economic growth this year, declining in 2024.
For example, Barbados is expected to register 10.5% growth this year, falling to 5% next year, Jamaica will register 3.2% growth in 2022, falling to 2% next year, Dominica will register 5.8% this year, falling to five% the following year.
The World Bank projects that Grenada’s economic growth this year will be 3.8%, down slightly to 3.4% the following year. Saint Lucia’s economy will grow by 7.9% this year and 6% next year, while Saint Vincent and the Grenadines will register 5% this year and grow to 6.3% the following year . The Bahamas will register growth of 8% in 2022 and 4.1% in 2023.
Suriname will see 2.3% growth this year, rising to 3% next year, while Belize will have seen 2% growth for this year and 2024. The World Bank did not give a forecast of economic growth for Trinidad and Tobago.
Maloney said Guyana had “astronomical growth and we expect 57.8% this year, falling to 25.2% next year”.
“These are extraordinary growth rates reflecting the development of this new sector and any government will have a challenge in managing these resource flows to be sure that you have not triggered inflation in the country and the central bank should take measures. measures to control this. “, added Maloney.
The economist said Caribbean countries in general would benefit from working as a group on issues such as seeking concessional funding from international agencies “to articulate their concerns…would be a very positive thing” and that the World Bank “stands ready to discuss these issues”.