By Vishani Ragobeer
Caribbean countries, largely dependent on exporting goods and providing services like tourism, have been beset by the COVID-19 pandemic. Now, however, the Caribbean Development Bank (CDB) is projecting greater economic recovery with new oil producer Guyana leading the region’s economic growth.
Economic growth among the CDB’s 19 Borrowing Member Countries (BMCs) is pegged at 9.1 per cent in 2022, accelerating the regional recovery from the COVID-19 pandemic that started in 2021.
“The projected outturn is dominated by Guyana,” CDB Director of Economics Ian Durant announced during the Bank’s annual news conference on Tuesday.
Growth in Guyana is projected to be a massive 47.5 per cent, the highest of the set of CDB BMCs. Beyond Guyana, the region’s favourable outlook is anchored by the expected surge in the Gross Domestic Product (GDP) of the other commodity- exporting countries.
For context, GDP simply refers to the total value of all the goods and services created in an economy excluding the cost of producing those goods and services.
Durant also noted that a resurgence of energy production in Trinidad and Tobago (T&T), because of the alleviation of supply-side constraints, will contribute to the region’s economic development.
The growth predicted for 2022 is also underpinned by expectations of accelerated implementation of several large infrastructure projects across the region.
Durant, however, cautioned that projected economic growth is subject to numerous risks including the emergence of new COVID-19 variants and resulting health implications, the continued rise in prices, heightened geopolitical pressures, rising interest rates and natural hazards like floods.
2021: MIXED GROWTH
With this expected growth in 2022, focus was also directed to the 2021 economic situation in the region. Service-exporting economies, particularly those heavily dependent on tourism, saw some economic gains that signalled marginal economic recovery, Durant noted.
There was an increase in productivity for hotels and restaurants as well as wholesale and retail trade. What is notable, however, was that there was an almost 10 per cent increase in tourist arrivals between January to September compared to the same period in 2020.
Why this is important is because travel restrictions resulting from the COVID-19 pandemic gripped the region and depressed many regional economies in 2020.
Though there was that 10 per cent increase in 2021, Durant, however, pointed out that the number of tourists arriving then was still a massive 65 per cent less than those who came in 2019 (that is, before the pandemic).
To sustain growth in tourism, Duran said that vaccination uptake and managing the pandemic with large returns to lockdowns are crucial.
Several countries recorded economic growth. These include: Belize (10.9 per cent), St. Lucia (6.8 per cent), Grenada (4.8 per cent), Antigua and Barbuda (4.7 per cent), Bahamas (3.1 per cent) and Barbados (1.4 per cent).
With the expectation of Guyana, the major commodity- exporters Suriname and T&T, saw economic declines. In T&T, lowered natural gas production and mandated closures (or lockdowns) in the service sector saw the country’s economy contracting by 2.9 per cent.
In Suriname, which is a nascent oil and gas sector like Guyana, the economy declined by 3.5 per cent. Guyana, contrastingly, recorded a 19.9 per cent economic growth attributed to both the oil and gas sector and other non-oil gains.
Durant explained that the varying economic performances illustrated some of the inherent weaknesses of Caribbean economies. What appears to be a weakness, he said, is countries’ dependence on exploiting their natural resources- whether that is through tourism or commodities like oil and agricultural goods.
Consequently, he emphasised, “The overarching need is to create more innovative and competitive economies.”
And as the region continues to work towards recovering from the pandemic, Durant emphasised, “… as we rebuild, we must focus on building back better to position the region for greater resilience, including production resilience.”