Caribbean Region Quarterly Bulletin: Volume 7: Issue 2: June 2018
Date
Jun 2018
The year 2017 brought mixed results for the countries of the Caribbean Country Department of the Inter-American Development Bank, and the situation remains similar in 2018. While The Bahamas, Barbados, and Jamaica have been benefiting from strong world demand and still low commodity prices, they are also dealing with fiscal challenges resulting from high debt-to-GDP ratios and related vulnerabilities. At the same time, Suriname and Trinidad and Tobago were still experiencing recessions. Guyana has become an outlier in the region because, based on strong gold prices and the prospect of revenues from oil extraction scheduled for 2020, the country has been experiencing strong economic growth, partly as a result of fiscal expansion. In 2018, recovery has strengthened for commodity producers, while tourism-dependent countries have been performing relatively well but with continuously subdued growth rates. The situation in Barbados has intensified as a new government has had to tackle both external and fiscal challenges that are beginning to threaten macroeconomic stability.
The outlook for the countries of the IDB’s Caribbean Country Department is relatively positive. However, deep structural reforms to diversity the economies and make them more competitive would be necessary for these countries to start growing at higher rates. In addition, still recovering from the last economic and fiscal crisis, the countries are in general ill-prepared to weather external shocks.