Reduced downside risks and better prospects for recovery
The current survey provides an overview of the economic performance for 2013 of the Bahamas, Barbados, Belize, Guyana, Jamaica, Suriname, Trinidad and Tobago plus the eight member states of the Eastern Caribbean Currency Union (ECCU) and the outlook for 2014 and 2015. Data were collected from a review of reports from national governments and through interviews with government officials in each of the countries analyzed.
The main findings are that while the Caribbean still faces a number of fiscal challenges it is anticipated that the situation will improve with positive growth over the medium term. At the same time, unemployment rates, especially for the service-based economies, are relatively high and continue to increase slowly in some cases. The survey also finds that inflation rates are relatively low, which has a positive impact on fixed income earners. With respect to investment, the domestic private sector remains risk averse as credit to this sector been increasing slowly. At the same time, public sector credit has declined, in part due to a number of programmes aimed at constraining the public sector.
Better economic performance is projected in 2014 and 2015, due to improved performance of the major export markets, the United States and Europe, and improved domestic investment. This is likely to increase employment and domestic demand, which have been depressed in the face of fiscal consolidation measures. It is also expected that inflows of both foreign direct investment (FDI) and remittances will increase due to anticipated better economic performance in the United States and Europe and that this will improve the current account balances.