What’s Holding The Caribbean In Low Growth Mode?

News Americas, WASHINGTON, D.C., Thurs. Oct. 9, 2014: Several factors have been highlighted by the IMF for low growth in much of the Caribbean region.

The IMF’s new World Economic Outlook report blames long-standing competitiveness problems, high public debt, and significant financial fragilities for the low growth.

As a result, said the body, risks remain high and tilted towards the downside. Jamaica for instance is expected to register 1.1 per cent growth in 2014, rather than the 1.3 per cent growth predicted in April.

However, there was good news for the Spanish-speaking Dominican Republic and Trinidad and Tobago. The DR should record 5.3 per cent real GDP growth in 2014, compared to the 4.5 per cent growth projected by the IMF in April while the fund now forecasts 2.3 per cent growth for Trinidad and Tobago this year, or 0.1 percentage points higher than the IMF expected six months ago.

Overall, IMF analysts say economic growth in Latin America and the Caribbean continued to slow in early 2014. But they predicted that regional growth will pick up to 2.2 per cent in 2015, 0.7 percentage points weaker than previously projected.

“Growth in the region is expected to average 1.3 per cent for 2014, the lowest rate since 2009 and 1.2 percentage points below the April 2014. The downward revision partly reflects weaker-than-expected growth outturns for the first half of the year and domestic demand growth that is now expected to be slower than previously projected,” the report said.