ECLAC report says,low growth trajectory to continue for the Caribbean

This was the organisation’s final report of the year and has confirmed that the Caribbean region will continue to show low growth.

ECLAC report says low growth trajectory to continue for the Caribbean
ECLAC report says low growth trajectory to continue for the Caribbean

The Economic Commission for Latin America and the Caribbean (ECLAC) released the Preliminary Overview of the Economies of Latin America and the Caribbean on the 14th of December, 2023.

This was the organisation’s final report of the year and has confirmed that the Caribbean region will continue to show low growth. In keeping with this trend, job creation is expected to decelerate, leading more people to the informal sector while the gender pay gap and other such effects persist.

José Manuel Salazar-Xirinachs, the United Nations Regional Commission’s Executive Secretary, presented the report at a press conference where he explained that Latin America and the Caribbean will grow 2.2% on average in 2023 and 1.9% in 2024.

This is evidence of a deceleration in growth from the level that prevailed in 2022. If the Caribbean is analyzed on its own, the region is expected to show a growth of 3.4%, compared to 6.4% in 2022. One must note, that these figures include the entire Caribbean, with the exception of Guyana.

Unsurprisingly, these estimates show a lack of dynamism in global trade and economic progress. Even as inflation has seen a decline, developed economies have not seen an alteration in their interest rates, raising the cost of financing. This is a trend that is expected to persist in the near future as changes to interest rates are not expected to be forthcoming.

Another aspect that has affected the growth rate in the region is the limited scope for monetary and fiscal policy changes at a domestic level.

On a more positive note, inflation is expected to close at 3.8%, a significantly improved figure from the 8.2% seen in 2022. Estimates also suggest that the trend will continue in 2024 with a figure of 3.2%.

José Manuel Salazar-Xirinachs made the following suggestions, “it is necessary to escalate productive development policies with a focus on strategic, dynamic sectors, carry forward policies to promote public and private investment, and adjust the financing framework to enhance resource mobilization.”

The Preliminary Overview 2023 suggests that the region must look into managing the foreign exchange and financial risks it is facing through productive development policies, thus stimulating domestic resource mobilization to expand the fiscal space and increase investments.

ECLAC has also stated that the international financial and taxation structure also needs alterations to promote resource mobilization in the region and help Caribbean nations achieve their Sustainable Development Goals.