World Bank economist says Caribbean economies yet to recover to pre-COVID era

By Hanan Redwan Published on October 05, 2022
World Bank economist says Caribbean economies yet to recover to pre-COVID era

A senior World Bank official Tuesday said that the gross domestic product (GDP) of the Caribbean has not yet recovered to its 2019 level as the region emerges from being among the hardest hit regions by the coronavirus (COVID-19) pandemic.

“We are not expecting that to be the case until 2024 and that reflects the overall slow rate of recovery in the region. Part of that is we know that many of the islands are tourism dependent and we had a hard time getting a handle on COVID,” said William Maloney, the World Bank’s chief economist for Latin America and the Caribbean.

He told reporters that many countries in the region are still recording low vaccination rates against the virus that has killed and infected millions of people globally.

He said most were below 40 per cent “which leaves us vulnerable to whatever new variant comes. It is important to realise that COVID is in recession right now, but it is very unpredictable and we have to be prepared for whatever is coming and that means those vaccination rates will have to rise…”

Maloney said that the region was also hard hit by the Ukraine crisis occasioned by Russia’s invasion of the Eastern European country since February “because we are net food and fuel importers, with perhaps the exception of Trinidad and Tobago, and so that puts additional strain on household budgets and government finances.

 “So this has made it a very difficult couple of years for the Caribbean. The bank has programmes I think for 19 countries in the region, focusing precisely on issues like fiscal sustainability, building resilience to natural hazards,” he said.

The chief economist said that in the case of Haiti, the French-speaking Caribbean Community (CARICOM) country is in a “very difficult situation.

“They continue to struggle with multiple pronged crises. You have got gang violence, lingering political institutional and instability and we have had persistent vulnerability to natural shocks. COVID of course exacerbated these and unfortunate to date, it has a low vaccination rate,” Maloney added.

 He further stated that the economy continues to contract, adding “we are seeing negative two and half per cent in 2022 and minus 0.1 per cent in 2023.”

“So the short term and the medium term situation is not extremely positive. The bank continues to support recovery from the 2021 earthquake by strengthening disaster risk capacity ….and we have also been working hard to address problems to access to quality learning and to mitigating Haiti’s food insecurity,” the economist stated.

He said the bank’s portfolio for Haiti has increased by 40 per cent over the last two years “but …it remains a very difficult situation.”

He said some Caribbean countries would be registering economic growth this year, declining in 2024.

For example, Barbados is expected to register a 10.5 per cent growth this year, dropping to five per cent next year, Jamaica will record a 3.2 per cent growth in 2022, falling to two per cent next year, Dominica will register 5.8 per cent this year, declining to five per cent the following year.

 The World Bank is predicting that Grenada’s economic growth this year will be 3.8 per cent, falling slightly down to 3.4 per cent the following year. St. Lucia’s economy will grow by 7.9 per cent this year, and six per cent next year, while St. Vincent and the Grenadines will register five per cent this year and increasing to 6.3 the following year. The Bahamas will register eight per cent growth in 2022 and 4.1 per cent in 2023.

Suriname will experience 2.3 per cent growth this year, increasing to three per cent next year, while Belize will have registered two per cent growth for this year and 2024. The World Bank did not give an economic growth forecast for Trinidad and Tobago.

Maloney said Guyana has been having “astronomically high growth and we are expecting 57.8 per cent this year, falling to 25.2 per cent next year.

“Those are extraordinary growth rates reflecting the development of this new sector and any government will have a challenge in managing those resource flows to be sure that you did not set off inflation within the country and the central bank would need to take measures to control that,” Maloney added.

 The economist said Caribbean countries in general would benefit from working as a group on issues such as seeking concessionary financing from international agencies “articulating their concerns…would be a very positive thing” and that the World Bank “stands ready to discuss these issues”.

Hanan Redwan

Hanan Redwan

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