Subdued Growth, Multiple Challenges For Latin America and the Caribbean

• The World Bank, in its Global Economic Prospects report for Latin America and the Caribbean, noted that in 2023, the region experienced a significant economic slowdown, growing just 2.2%, down from 3.9% in 2022. This deceleration came within the context of heightened inflation, tight monetary conditions, weak global trade, and adverse weather events.
• “The economic outlook for the region suggests a gradual recovery, with growth projected to increase to 2.3% in 2024 and 2.5% in 2025. While the lingering effects of previous monetary tightening will continue to influence near-term growth, their impact is expected to diminish. As inflation slows, central banks are expected to reduce interest rates, alleviating obstacles to investment growth, the World Bank reported.
• The World Bank noted that excluding Guyana, which is experiencing a resource boom, Caribbean economies are expected to grow by 4.1% in 2024 and 3.9% in 2025, partly due to the ongoing expansion of the tourism sector.
• The Bahamas is estimated to have registered growth of 4.3% in 2023, then fall to 1.8% in 2024 and 1.6% in 2025. Barbados, which registered growth of 4.6% last year, will record 4.0% and 3.0% growth over the next two years.
• Similarly, Belize's estimated 4.5% growth last year is predicted to fall to 3.5% and 3.3% in the next two years. St Lucia's 3.2% economic growth in 2023 will decline to 2.9% and 2.3% over the next two years.
• Regarding the region's downside risks, the World Bank anticipates that escalating geopolitical tensions, especially in the Middle East, could disrupt energy markets and cause oil prices to surge.

(Source: World Bank Group)