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Financial News

Aug 2014 Financial News

Two percent growth for Caribbean

Aug 05, 2014

THE Caribbean is expected to see two percent economic growth by year’s end, with a slight increase of 0.5 percent next year, for projected growth of 2.5 percent in 2015.

This was the outlook contained in the Economic Commission for Latin America and the Caribbean’s (ECLAC) “Economic Survey of the Caribbean, 2014,” presented yesterday by the commission’s Economic Affairs Officer, Sheldon McLean.

“It is noteworthy that the Caribbean performed slightly better in 2013 relative to 2012, with GDP (Gross Domestic Product) expanding by 1.1 percent in 2013. Growth of 2.0 percent and 2.5 percent is projected for 2014 and 2015 respectively.”

The 2.2 percent growth projection for 2014 is a downgrade of 0.5 percent from ECLAC’s April 2014 forecast.

Reasons for this drop in forecast growth included the “dampening impact” of lower primary commodity prices, below average tourist arrivals and expenditure in 2013.

“Looking at the countries individually,” McLean added, “there were five that posted negative growth. Among these were Anguilla and Saint Lucia, which experienced a larger decline last year and Barbados, which may have slipped back in to recession.”

Meanwhile, weak growth in services-based economies continues to place upward pressure on unemployment levels. Accordingly unemployment rates have been “inching up.”

“Saint Lucia continues to experience high levels of unemployment; 23.8 percent, with youth unemployment estimated to be 39 percent. The situation, however, is more acute in Grenada, where the unemployment rate stands at 33.5 percent, with unemployment among youths pegged at an alarming 55.6 percent,” McLean noted.

Over in Barbados, a combination of negative growth and fiscal consolidation, which saw 3,000 public service workers retrenched at the end of 2013, has led to a slightly higher unemployment rate of 11.7 percent.

In contrast, McLean said, Trinidad and Tobago “commands the lowest unemployment rate; 3.7 percent. Although some analysts have suggested that the labour market may also reflect a high level of what has been termed ‘disguised employment’.”

He added that “These trends have lead some (IDB: Caribbean Sclerosis) to conclude that the Caribbean has experience a period of jobless growth. However, given the lack of data and variation in experiences, that conclusion may be a bit premature.”

McLean was speaking at the commission’s Chancery Lane, Port-of-Spain offices, where just prior to his presentation on the Caribbean situation, stakeholders listened to a video-feed from Chile where Alicia Bárcena, ECLAC’s Executive gave an overview of the “Economic Survey of Latin America made to stakeholders, America and the Caribbean, 2014.”

“Economic growth in Latin America and the Caribbean has been slowing since 2011, and the data available for the first six months of 2014 indicate that the region will not match the growth rate of 2.5 percent recorded in 2013.

“Growth has been muted over the first few months of the year, owing to stagnant gross fixed capital formation and faltering private consumption. Government consumption, on the other hand, has picked up, and the net contribution of exports has been more positive than during the same period of the previous year. A regional growth rate of 2.2 percent is forecast for 2014,” Bárcena stated.

The cut-off date for updating the statistical information in ECLAC’s 2014 survey June 30, 2014.

 

Source:
By Sasha Harrinanan 
Newsday
Tuesday August 5, 2014

http://www.newsday.co.tt/business/0,198650.html