Click here to print page

IMF projects 1.4% GDP growth for Latin America and Caribbean

Observer writer

Friday, April 12, 2019

Real GDP for Latin America and the Caribbean in 2019 is projected to grow at 1.4 per cent, according to the latest World Economic Outlook report from the International Monetary Fund (IMF).

Jamaica's growth in the same period is projected at 1.7 per cent. However, while the region's growth is expected to rise to 2.2 per cent in 2020, Jamaica's is only expected to increase to 1.9 per cent for that year.

The growth figures for individual countries in the region vary considerably with Dominica projected to experience the strongest growth in 2019 at eight per cent. Some of the other nations with the highest 2019 growth figures in the region include Antigua and Barbuda at four per cent, Dominican Republic at 5.1 per cent, Grenada at 4.2 per cent and Panama at six per cent.

On the opposite end of the spectrum, Venezuela's disastrous economic situation is evident in its -25 per cent 2019 growth projection, while other countries expecting negative growth include Nicaragua at -5 per cent, Ecuador at -0.5 per cent, Barbados at -0.1 per cent and Argentina at -1.2 per cent.

“For Venezuela it is very hard to make predictions at this point and it's a humanitarian crisis, food crisis, medicine crisis,” explained Oya Celasun, division chief, Research Department, IMF. “One worries that oil production is plummeting and that has led to our downgrade for that country.”

Celasun gave her assessment at the 2019 World Economic Outlook media conference in Washington, DC on April 9 and she also commented on the outlook for Barbados.

“For Barbados we have an IMF programme, so the prospects are that activity strengthens somewhat with the build-up of confidence as the programme is implemented,” she explained. “It is essential for that to happen to return to positive growth in 2020, that the targets are met and the reforms are steadily implemented.”

Barbados, which is expecting -0.1 per cent growth in 2019, is coming from -0.5 per cent in 2018 and expecting a positive 0.6 per cent in 2020. The country has implemented austerity measures since entering into an IMF programme in 2018 to address enormous debt in the region of 150 per cent of GDP and a fiscal deficit of approximately six per cent.

In giving an assessment of the Caribbean, Celasun revealed that tourism-dependent economies are doing somewhat better than commodity-dependent economies. She explained that the prospects of tourism-dependent economies are tied to advanced economies and while there has been some softening, growth is generally stronger.

“The commodity-dependent ones are still in a process of adjusting to the lower commodity prices, some of them oil prices,” she said.

Apart from Trinidad and Tobago, which is expecting zero growth this year, Haiti which, is anticipating 1.5 per cent growth; and Barbados, which has already been mentioned, all the other Caricom countries mentioned in the report have higher projected growth figures than Jamaica for 2019.