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Compiled By NAN Business Editor

News Americas, NEW YORK, NY, Fri. April 17, 2020: Here are some of the top business and finance news making headlines across the Caribbean this week.


Three top global finance institutions – the IMF, the World Bank and the IDB are all forecasting tough times ahead for the Caribbean and Latin American region this year.

The IMF says the region is likely to see a -5.2-percentage decline in growth this year while The World Bank earlier this week said Gross Domestic Product (GDP) in the Latin America and Caribbean region is expected to be -4.6% in 2020. Those forecast to see the worst are Grenada and St. Lucia, which could record -7.3 and -7.2 growth, respectively.

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The Inter-American Development Bank, IDB, says in its Macroeconomic Report that the Caribbean and Latin America will see sharp growth reductions of between 1.8 percent and 5.5 percent of GDP in 2020 due to the impact of the coronavirus pandemic.

The Bank predicts the economic damage will carry into 2021 and 2022 unless governments implement well-focused programs to offset the impacts.

Trinidad And Tobago

The IDB is forecasting the T&T economy could fall into a recession. This it said is due to the economic crisis caused by the novel coronavirus which is impacting several sectors, including tourism and construction as well as manufacturing. That coupled with reduced  demand  for  fossil  fuels,  compounded  by  an  oil  price  war between  Russia  and  Saudi – Arabia which has caused energy  prices  to drop  significantly,  will likely transmit  to  lower  GDP  growth  through  consumption,  investment  and employment effects, the IDB said. “It is very likely that the economy will fall into a recession,” Bank analysts added.


The IDB’s Macroeconomic Report says externalities of  COVID-19  will  have  strong  negative  effects  on  economic  growth  in  Barbados. The main shock transmission channel is the tourism sector. Pre-COVID-19, the Bank had forecasted estimated real GDP growth of 0.6 percent in 2020. However, they now expect the economy to face a severe contraction and see a negative growth.


Prior to the crisis, real GDP growth for FY2020/21 was projected to be about 1.1%, set against the backdrop of expected strong domestic conditions and buoyant external demand for to tourism and commodities like bauxite.  But the  unfolding  COVID-19  crisis  is  likely  to  affect  a  number  of  key sectors  of  Jamaica’s  economy, says the IDB report, including the tourism  sector,  which  accounts  for  a  very  large  share  of both total economic output and employment – 34% and 31%, respectively. In this context, this crisis and implications for Jamaica’s economic sector are without historical precedent, the report’s authors added.   

Beyond tourism, Jamaica’s economy is likely to be adversely affected by  shocks  to  trade  and  financial  flows,  as  well  as  the  costs  associated  with mitigation efforts at home (e.g., forced closures of businesses), the report said. Revenue implications of shuttered businesses and sectors, as well as costs associated  with  mitigation  efforts,  will  also  have  adverse  implications  for  budgetary outcomes,  forcing  the  government  to  run  higher  deficits  than  originally  expected, the IDB added.


Meanwhile, Jamaica’s Tourism Minister, Edmund Bartlett says the initial $250 million of the $1 billion committed to long-awaited Tourism Workers Pension Scheme by the Andrew Holness administration has been paid over to the newly selected-fund manager, Sagicor Jamaica Limited.

He noted that he is currently awaiting the House’s approval of the regulations, which will pave the way for the Scheme’s implementation, once industry workers return to their jobs. The pension scheme is a defined contributory plan supported by legislation and will require mandatory contributions by workers and employers.

The Tourism Workers Pension Scheme is designed to cover all workers ages 18-59 years in the tourism sector, whether permanent, contract or self-employed, the ministry said. It further noted that this includes hotel workers as well as persons employed in other tourism subsectors such as craft vendors, tour operators, red cap porters, contract carriage operators and workers at attractions.

Benefits will be payable at age 65 years or older. The Ministry of Tourism is providing $1 billion to seed the fund, so that immediate benefits can accrue to qualified pensioners, who have met the vested period of five years.


Economic growth in Suriname is expected to decline in 2020, the IDB says, despite initially forecasting GDP growth to reach 2.5 percent in 2020. However, given the recent lower growth at best or an economic contraction at least similar to the 2015 decline (- 5.6 percent), that is also is now expected for 2020, the Bank’s analysts said.

The Bahamas

The IDB says The Bahamas’ economy, which had already experienced a negative shock due to Hurricane Dorian in the last quarter of 2019, will likely contract substantially in 2020 as a result of COVID-19. Prior to COVID-19, the real GDP growth forecast in 2020 had already been revised from 1.7 percent to – 0.6 percent because of Hurricane Dorian.  The authorities now expect a more significant contraction in 2020. Although the extent of the contraction remains unclear, the authorities announced that the total economic impact could range between US$258 million and US$1 billion (or about 2 to 8 percent of annual GDP) through June 2020.


Haiti is the lone Caribbean nation that has secured approval for immediate debt relief from the IMF. The Executive Board agreed to the relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic. The other recipients are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.

Support For Families In Need

RBC Royal Bank this week announced a donation for non-profit organizations across the Caribbean who are supporting food security for at-risk families and those in need during the ongoing novel coronavirus pandemic.

RBC says it is donating over USD $330,000 to Red Cross societies across the region; Hands for Hunger in The Bahamas; and Cayman Feed our Future and the Cayman Food Bank in the Cayman Islands, all to support food security initiatives. This donation is in addition to RBC’s global commitment of more than CAD $2 million to fight COVID-19 through various partners such as the World Health Organization’s COVID-19 Solidarity Response Fund, Feeding America, and Food Banks Canada.

“COVID-19 has had an impact on every country and territory where RBC operates in the Caribbean,” said Rob Johnston, Head of Caribbean Banking, Royal Bank of Canada. “Across the region, we are seeing how NGOs and other organizations are stepping up to provide for those in need during these uncertain times. We are proud to stand with these groups and to help support them in their vital work.”

Cruise Stocks

BOFA’s analyst Andrew Didora has downgraded Royal Caribbean from Neutral to Underperform and cut the price target from $117 to $25.

The analyst also downgraded Norwegian Cruise Line from Buy to Neutral and cut the price target from $61 to $18.

Norgwegian has been the single worst-performing stock in the entire S&P 500 in 2020, dropping 80.5% year-to-date.

The cruise line industry has been one of the hardest-hit industries from the coronavirus outbreak. Not only is the cruise business shut down indefinitely, there is uncertainty about how long it will take the business to recover and how significant that recovery will be. Norwegian shares may look cheap down 80%, but Bank of America analyst Andrew Didora says there is simply too much uncertainty to be aggressively buying the dip.

“With the booking curve for cruise 9-12 months on average and the outbreak coinciding with the important 1Q bookings period, we do not expect a quick snapback, and we forecast 2H20 net yields of -15%,” the analyst said.

Royal Caribbean is expected to shoulder a greater burden than its peers, and the analyst said the company should suspend its dividend to ensure liquidity.

Caribbean Rum

Caribbean rum producers have taken on a special role in many regional countries as the supplier of alcohol for sanitation purposes.

“Our member producers are reaching out to health ministries and other government agencies to support their alcohol requirements for sanitation and related needs as the region battles the coronavirus, COVID-19. We are diverting production to alcohol as necessary and are doing what we can in this time of crisis,” stated Vaughn Renwick, CEO of the West Indies Rum and Spirits Producers Association (WIRSPA).

In addition, Caribbean rum producers are gearing up to address the unprecedented and severe health and economic challenges posed by the spread of COVID-19 internationally, as well as in their domestic markets.

As a major employer and an important economic sector, heavily dependent on the hospitality industry, the rum industry is particularly concerned about the recent spread of the virus in Caribbean countries and its impact on the health of citizens and the regional economy.

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