The International Monetary Fund (IMF) has given a bleak outlook for economic growth in the region, stating that real gross domestic product (GDP) growth in Latin America and the Caribbean is expected to occur at its slowest pace since 2016 this year.
Specifically, tourism dependent economies like The Bahamas’ are projected to expand by 1.9 percent in 2019 and 2020, slightly lower than the 2 percent growth projected in April in the World Economic Outlook forecast.
IMF Director of the Western Hemisphere Department Alejandro Werner said regional growth for The Bahamas and the rest of the Caribbean continues to be impeded by high public debt, poor access to finance, high unemployment and vulnerability to commodity and climate-related shocks.
“In the Caribbean, economic prospects are generally improving, but with substantial variation across countries. Growth in tourism-dependent economies is expected to strengthen to around 2 percent in 2019-20, supported by still strong U.S. growth — the main market for tourism in the region — and continued reconstruction from the 2017 hurricanes,” he said at a press conference on the regional economic outlook earlier this week.
“With improved energy production and higher commodity prices, commodity exporting countries are expected to see some modest recovery in growth, except in Guyana, where the start of oil production in 2020 will provide a substantial boost to growth.”
As a region, real GDP is expected to expand by just 0.6 percent this year before rising to 2.3 percent in 2020, reflective mainly of heightened U.S.-China trade tensions, and somewhat lower global growth, Werner said.
In its Article IV consultation on The Bahamas, released last month, the IMF projected 1.8 percent growth in real GDP this year that it forecasted would slow to around 1.5 percent growth over the medium term.