According to ECLAC, Caribbean economies predicted to grow by 2.7 percent in 2014

The Economic Commission for Latin America and the Caribbean (ECLAC) says the region will grow an average of 2.7 percent in 2014 due to limited dynamism of the region’s principal economies.  In the released report, the Updated Economic Overview of Latin America and the Caribbean 2013, ECLAC said the 2014 regional growth rate would be slightly higher than 2013 (2.5 percent), but lower than the rate forecast in December (3.2 percent).

ECLAC then advised that this is due to an “external context still marked by uncertainty and lower growth than expected for the region’s larger economies”.  Furthermore, in its report, ECLAC said activity indicators for developed countries-especially the United States, United Kingdom, Korea, Germany and several others from the euro zone – have shown  recovery.

In addition, the demand for commodities is forecast to remain limited, especially mining and food products, which, combined with currency appreciation in developed countries, would cause commodity prices to drop modestly.  The decrease would affect the economies that export these products, like those of South America.

ECLAC points out that the United States’ recovery will have a positive impact on the economies of its closest neighbors, especially Mexico and Central America, considering its importance as a trade partner.  At the same time, the upturn of developed countries will benefit the Caribbean nations, more specialized in service exports, due to better performance by the tourism sector, ECLAC said.

It said St. Kitts and Nevis will grow by 3.1 percent, Bahamas 2.5 percent, St. Vincent and the Grenadines 2.3 percent and Trinidad and Tobago 2.1 percent, the same figure projected for the whole group of Caribbean countries.  ECLAC then stated, “The perspectives for the year show a global scenario with lower liquidity, which entails important challenges in matters of macroeconomic policy and external financing for the Latin America and the Caribbean region.”

“In this context of modest regional economic growth, there will not be a meaningful recovery of employment levels,” it warned, stressing that this could translate into an increase in unemployment rate, which in 2013 registered a new minimum of 6.2 percent, nly if the drop in labor force participation seen last year is reverted.