CDB projects return to economic growth in region this year

• February 27 2021
• http://www.jamaicaobserver.com/news/cdb-projects-return-to-economic-growth-in-region-this-year_215836

BRIDGETOWN, Barbados (CMC) — The Barbados-based Caribbean Development Bank (CDB) is projecting an average gross domestic product (GDP) growth of 3.8 per cent this year for Caribbean countries.

But in its Regional Report: 2020 Review and 2021 Outlook, released Thursday, the region's premier financial institution, said the projections is clouded by the ongoing uncertainty, caused by the coronavirus pandemic.

“The pandemic has underscored the importance of building economic and social resilience. We can only reduce the susceptibility to external shocks when we accelerate the diversification of our economies; broaden our productive base; and take appropriate measures to build competitiveness whilst providing adequate safety nets to protect our most vulnerable groups,” said CDB President Dr Wm Warren Smith.

The bank said that 2020 was “an extremely difficult year in which the economies of its 19 borrowing member countries (BMCs) contracted by 12.8 per cent on average due to the onset of COVID-19”.

In 2020, the majority of BMCs registered double-digit declines in GDP. Countries with significant tourism industries, such as The Bahamas, Barbados, Belize, Cayman Islands, Dominica, and Grenada, were hard-hit by a more than 70 per cent drop in overnight visitors in 2020, which spilled over to affect other economic sectors.

An increase in agricultural production in Jamaica could not prevent the economy shrinking by 10.4 per cent. Agriculture in Belize was affected by a severe drought from the previous year, and then a reduction in tourism-related demand. The economy contracted by 13.3, the CDB said.

It noted that Guyana was the only economy to record economic growth (26 per cent), solely due to the start-up of its first oil production. However, growth was lower than expected due to lower global oil prices.