World Bank Predicts Slowdown In Caribbean Economies

• The World Bank projected a slowdown in growth in the Caribbean, as it delivered a grim warning that many of the world’s countries face recession. The financial institution’s Global Economic Prospect report said the world economy was now headed toward “a protracted period of feeble growth and elevated inflation”. 
• The World Bank is projecting 2.9% global growth this year, down from 5.7% in 2021, and credits the expected lack lustre performance to Russia’s invasion of Ukraine and the effects on key commodities, coupled with the fallout from the COVID-19 pandemic. 
• According to the Bank, the unstable conditions have severely hit Latin America and the Caribbean (LAC) economies and expected economic growth in the region will slow to 2.5% this year and further to 1.9% in 2023. Growth in the Caribbean is however projected at 6.9% in 2022 and 6.5% in 2023, helped by recovering tourism. 
• Notably, the region’s growth forecast includes spillovers from weaker global growth, increased food insecurity and social unrest, continued higher-than-forecast inflation and financial stress. In addition, the war in Ukraine is having substantial effects on the region via higher commodity prices and weaker global growth. 
• Further, in a context of slow growth and rising US interest rates, financial stress could take hold in some economies of the region, especially if policymakers are unable to credibly commit to reforms to sustainably boost growth. To reduce the risks, the World Bank said policymakers should work to coordinate aid for Ukraine, boost the production of food and energy, and avoid export and import restrictions that could lead to further spikes in oil and food prices.

(Source: Barbados Today)