At
the launch of the Preliminary Overview of Latin America and the
Caribbean, Sheldon McLean, the Coordinator of Economic Development
Unit of ECLAC, Port of Spain, reviewed the macroeconomic performance
of the Caribbean economies in 2019 and outlined projections for 2020.

Economic
growth was subdued in
2019 across most Caribbean economies due to the impact of fiscal
austerity measures in some countries and lack of investor confidence.
The weighted average real
growth in the region remained unchanged at 1.4% in 2019 relative to
2018. Among the goods-producing economies, GDP growth is expected to
be 1.2% in 2019 (up from 0.8% in 2018), while the service-producing
economies declined marginally to 1.7% (down from 1.8% in 2018).
There were, however, some strong
growth increases as growth strengthened in the hurricane ravaged
economies of Dominica and Antigua and Barbuda as reconstruction
efforts intensified, foreign direct investments strengthened and the
tourism industry recovered with public sector investment support. The
three fastest growing economies for 2019 were Dominica (9.0%),
Anguilla (6.3%) and Antigua and Barbuda (6.2%).

This
marginal growth trend is expected to continue into 2020 for most
Caribbean economies but will be heavily driven up by skyrocketing
growth of 85.6% forecasted for the Guyanese economy as
commercial oil production by ExxonMobil is carded to begin in
December 2019. The
forecasted weighted
average real growth across the Caribbean region is 5.5% in 2020.
However, with the exclusion of Guyana, the weighted average real
growth falls to 1.5%. The forecasted average rate of growth among
the goods-producing economies in 2020 is 10.4% but plummets to 1.6%
when Guyana is excluded. Growth in the Trinidad and Tobago economy is
also expected to improve to 1.5% (up from 0.4% in 2019) supported by
new natural gas projects and an increased implementation of public
sector investment programmes ahead of the general election.

Alternatively,
growth among service-producing economies will decline to 1.4% in 2020
relative to 1.7% in 2019 as Bahamas bears
the economic impact of the passage of hurricane Dorian and the
reconstruction momentum across the Dominica’s economy slows.
However, the economies of the Organization of the Eastern Caribbean
States (OECS) will continue to post strong growth of 4.1% led by
Antigua and Barbuda (6.5%), Grenada (4.0%) and Saint Kitts and Nevis
(3.5%), which is above the global growth rate of 3.4%. More
specifically, strong investments, especially foreign direct
investment, supported by public sector investment projects, are
expected to continue to drive growth, increase employment and
consumption in Antigua and Barbuda. Downside
risks to the 2020 forecast include an active hurricane season,
continued uncertainty around commodity prices, lingering trade
tensions, and Brexit.

Despite
efforts to restore healthy public finances, there was slippage in
2019 with the fiscal deficit worsening from 1.2% of GDP in 2018 to
2.2% of GDP in 2019 owing to relatively large increases in the
deficit in a small number of countries that offset fiscal
consolidation. Generally, the deficit was higher in the goods-based
economies (4.0% of GDP) than in their service-based counterparts
(1.5% of GDP). With an
average debt-to-GDP ratio of 67.9% in 2019, at its lowest point since
2010, Caribbean economies moved closer toward the debt sustainability
benchmark of 60%, a 2.6 percentage points decline relative to 2018.

The
Caribbean continues to grapple with hurricanes and climate change
related disasters. In 2019, the islands of Abaco and Grand Bahama
were devastated by the passage of hurricane Dorian at an estimated
total cost (damage, losses and additional costs) of US$2.5 billion.
The social sector bore the brunt of the damage at an estimated US$1.6
billion with Abaco bearing over 85% of the impact. The mainstay
tourism sector in the two islands was severely impacted to the tune
of US$855 million. The Bahamas needs to frontload investment in risk
reduction and resilience to reduce the impact of future disasters.

ECLAC continues to engage member States that are threatened by these environmental threats, as well as economic threats such as unsustainable debt burdens and lack of concessional finance. Technical assistance has also been provided to encourage Economic restructuring and industrialization. By providing this support, member States will be better positioned to achieve the SDG agenda.