UN report: Caribbean has lost economic momentum

A new United Nations report has warned that the economic recovery in the Caribbean has lost momentum, and is blaming the situation on slowing external demand, ongoing global policy uncertainty and country-specific factors.

The United Nations World Economic Situation and Prospects mid-2019 report said the situation has prompted a downward revision of the short-term growth outlook.

In the Caribbean, the expected onset of commercial oil production in Guyana will likely boost regional growth in 2020, the report added. It said that the growth outlook for the Caribbean would remain at 1.9 percent this year, growing slightly to 2.5 percent in 2020.

“The growth outlook for many developing economies has also weakened. Southern Africa, Western Asia and Latin America and the Caribbean have seen particularly large downward revisions for growth in 2019,” said the report.

It said regional gross domestic product (GDP) is projected to expand by 1.1 percent in 2019, following estimated growth of 0.9 percent in 2018.

The report noted that the risks to the outlook remain tilted to the downside. It said sharper-than-expected slowdowns in the region’s main trading partners, namely, the United States, China and the European Union, or renewed financial volatility could further weaken their recovery.

“In several of the region’s economies, ongoing political uncertainty clouds the prospects for investment and growth. In view of significant downside risks, limited inflationary pressures and constrained fiscal space, most central banks are likely to maintain accommodative monetary policies to support growth.”

The report said that per capita income growth in several parts of Africa, Western Asia, the Caribbean and Latin American countries is expected to remain very weak in the outlook period, saying this poses additional challenges for the Sustainable Development Goals, including the goal to universally eradicate poverty by 2030.

The report further noted. that while poverty remains predominantly rural, further progress on poverty reduction also hinges on the effective management of ongoing urbanization. -(CMC)