The International Monetary Fund is projecting an uptick in economic activity for the Caribbean for 2019-2020 thanks to robust tourism from the US, reconstruction from the devastating hurricanes of 2017 in some tourism-dependent countries, and higher commodity production in some commodity exporters.
In a statement the IMF said growth in the region was expected to be 1.8 per cent in both 2019 and 2020 for tourism-dependent countries and for commodity exporters, 1.5 per cent in 2019 and 5.5 per cent in 2020. While it is not mentioned in the IMF statement, commercial oil production in Guyana is expected to begin in 2020.
Overall, for the Latin American and Caribbean, growth in the region is expected to advance by two per cent in 2019 and 2.5 per cent in 2020. Economic activity in Latin America continues to rise, but at a slower rate than previously anticipated, the IMF said.
On Monday January 21st, the group gave its World Economic Outlook, lowering the global growth projection to 3.5 per cent in 2019 and 3.6 per cent in 2020. The weakening global economy and rising policy uncertainty are contributing to slowing Latin America’s growth momentum, the Fund said, still well below peer countries in other regions.
“A tightening of global financial conditions and lower commodity prices brought on by US-China trade tensions have contributed to the region’s slowdown. In addition, monetary policy was tightened in some economies to contain inflationary pressures stemming partly from currency depreciation, which further dampened growth,” the IMF said.
Regarding Venezuela, the IMF has said the economic and humanitarian crisis continues. Real GDP is projected to decline further in 2019, bringing the cumulative decline since 2013 to over 50 per cent, driven by plummeting oil production and worsening conditions for the non-oil sector. Hyperinflation and outward migration are also projected to intensify in 2019. Evolving political developments add another layer of uncertainty to the country’s outlook, the IMF said.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.