Regional economies except Guyana to slow down in 2023
… Caribbean’s newest oil producer to expand by 30%
Countries in the Latin America and Caribbean region are projected to record lower rates of economic growth in 2023 than were recorded in 2022. But the region’s newest oil producer, Guyana, should experience the highest levels of economic expansion- some 30 per cent.
This is according to a newly-published report released by the Economic Commission for Latin America and the Caribbean (ECLAC).
ECLAC projects that the region’s economic growth next year will be a third of the rate forecast for 2022.
In 2022, the region experienced Gross Domestic Product (GDP) growth of 3.7 per cent. But in 2023, the region is only expected to record a 1.3 per cent GDP growth rate.
Guyana, however, is expected to record a 30 per cent growth rate- the highest in the region. St. Kitts and Nevis should record the second highest growth rate, 10 per cent.
Though not mentioned in the report, Guyana’s growth is largely on account of the country’s nascent oil and gas sector. Since 2019, the country has recorded significantly high growth rates even in face of global economic shocks like the COVID-19 pandemic and the Ukraine/ Russia crisis.
Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy (in this case, Guyana’s economy) in a given year. In simpler terms, the real GDP measures a country’s total economic output, adjusted for price changes.
The other oil producers in the Caribbean, Suriname and Trinidad and Tobago, are projected to record 2.4 per cent and 2.0 percent growth rates, respectively, next year. A 2.9 per cent growth rate is projected for Brazil and a 5.0 per cent rate for Venezuela.
Meanwhile, the regional economic slowdown, ECLAC said, is attributed to the effects of restrictive monetary policies, limitations on spending, lower levels of consumption and investment, and other constraints.
Additionally, it was noted that labour market recovery from the COVID-19 pandemic in 2022 did not allow for eliminating the traditional gaps between men and women. As such, limited labour force participation, unemployment, a decline in wages and an increase in people working in the informal sectors of the economy were seen.
Because of these constraints and the resulting lowered levels of economic growth, the commission encourages governments to prudently manage their economies.
“On fiscal matters, officials must avoid premature spending adjustments and expand fiscal space by reducing evasion and avoidance, reviewing tax expenditures, carrying out reforms to increase tax collection and the tax structure’s progressivity, and with multilateral support via the mobilisation of global liquidity.
“It is also necessary to make progress on improving the efficiency and effectiveness of public spending to enhance fiscal policy,” the report said.
