The Caribbean’s commodity-exporting countries, including Guyana, Suriname and Trinidad & Tobago are likely to see a sharp surge of 20% in their Gross Domestic Product (GDP) growth this year, according to the International Monetary Fund (IMF).
However, their growth may slow down to 16.4% in 2023, as the demand for commodities is likely to decline in the months to come.
GDP growth in Caribbean countries heavily dependent on tourism, such as the Bahamas, Antigua, Dominica, and Jamaica, is expected to reach only 3.2% this year.
The rising interest rates in the United States and the spread of Covid-19 in mainland China will likely hamper economic growth in Latin America over the next year, stated the IMF.
The high cost of borrowing, caused largely by the ongoing tightening of monetary policy in the US, could accelerate capital outflows in the region, complicating the scenario for central banks.
Rising inflation in Latin America has already worsened the inequality and poverty situation, says the bank, which urged regional governments to support low-income households in order to reduce the risk of social unrest.
“We forecast Brazil’s expansion will slow to 0.8% this year following last year’s growth of 4.6%. Mexico will decelerate to 2%. Colombia will likely post a lower deceleration with growth at 5.8%,” the bank wrote in a blogpost.
“Growth in Chile and Peru will be 1.5% and 3%, respectively, pointing to very significant reductions relative to their prior year’s double-digit rates.”, it added.