By Tom Michaels, UK.
News Americas, LONDON, England, Mon. Feb. 24, 2014: Although much of the world in 2013 – including the USA – saw economic shrinkage or stagnation, it appears as though the Caribbean saw mild growth through the year of 2013. This growth is forecast to continue through 2014 to the tune of 2.3 percent, though economists’ predictions are never 100 percent accurate.
2013 a Breakthrough Year
According to the Caribbean Development Bank (CDB), the regional countries which compose the Caribbean generated an economic growth of upward of 1.5 percent in 2013, as compared with 1.2 percent in 2012. This demonstrates a marked increase, which, in economic terms is significant progress for a nation marred by poverty (although much has been achieved on this front over the past several years).
So what is the reason for this increase in GDP? As per usual in the real world of macro-economics, there are a great number of factors which seem to have turned the Caribbean into a territory of growth. The first, in Barbados, is attributed to the rise in jobs as a result from larger economies, which, when combined with direct foreign investment, has turned the region into a profitable one.
Some of the least wealthy nations also saw economic growth, too, with regions such as Haiti and Suriname experiencing rates of expansion between 4 and 6 percent. This was driven by large progress in the construction and agriculture sector. Additionally, the growth was accelerated by a burgeoning tourism industry.
Elsewhere, such as in Belize and Trinidad and Tobago, growth was solid, and can be attributed to general economic success of the region as a whole – although Trinidad did generate some significant (and growing) income from its cement exports.
Strong Predictions for 2014
In Bridgetown, at a recent economic meeting held by the CDB, some have claimed that the Caribbean region’s growth may reach upward of 2.3 percent, given the strong positive growth exhibited across the 2012-2013 timeframe.
In a statement, the economists in question said “We hope the recovery in regional tourism strengthens and the expectations of air transport improve, and the costs of the fuels coming from new decreases in the prices of raw materials will help us to the economic growth”.
The reference to ‘air transport’ refers to the recovery across the territory in regional tourism which many predict will strengthen as growth in the US continues, and expansion in the Euro Area continues. Similarly, many expect that improved airlift and substantially lower fuel costs will help tourism grow, particularly in the next 2-3 years.
International Investment and Support
Lowering commodity costs will not just benefit the tourism industry. It will also create new opportunities for foreign investors abroad, who will be able to take advantage of the reduced costs on the FX market.
This will have a knock on effect with the Caribbean economy, which will certainly see the benefit of international support, and this will likely improve GDP growth across the area.
Ultimately, the Caribbean is participating in a period of strong growth at the moment, and this is set to increase over the coming year – if economists’ predictions remain true.