Basseterre, St. Kitts, August 26, 2018 – For another year under the Timothy Harris-led Team Unity Government, the once-upon-a-time robust economy of St. Kitts and Nevis is being overshadowed by most of its regional counterparts.
According to the Economic Commission for Latin America and the Caribbean (ECLAC), the Caribbean and Latin America together should experience a growth rate in the order of 1.5 percent, but Antigua and Barbuda is expected to record the strongest growth in the English-speaking Caribbean – the fifth highest rate of growth overall – at 4.2 percent.
Antigua and Barbuda is followed by Grenada at 3.5 percent and Guyana at three percent.
ECLAC said that the Dominican Republic and Panama will lead the region’s growth, with increases in Gross Domestic Product (GDP) of 5.4 and 5.2, respectively, followed by Paraguay (4.4 percent,), Bolivia (4.3 percent), Antigua and Barbuda (4.2 percent), and Chile and Honduras (both with 3.9 percent).
The Barbados economy is expected to be the second worst performing in the English speaking Caribbean this year, with only the hurricane ravaged-Dominica performing worse.
According to the ECLAC document, the growth in the region was due mainly to “a rebound in domestic demand, private consumption especially, and a slight increase in investment.”
The survey pointed out that the regional growth was taking place in a complex global scenario, characterized by trade disputes between the United States, China and other nations; growing geographical risks; a decline in capital flows toward emerging markets in the last few months; rise in sovereign risk levels; depreciations of local currencies against the US dollar, and slowing global economic expansion.
The report anticipated that total public spending would increase this year as a result of a greater need for reconstruction in the sub-region after several devastating natural disasters, with increases in capital expenditure of 2.8 points of gross domestic product (GDP) in Grenada and 0.8 points in Antigua and Barbuda.
“However, current primary spending should continue its downward trend, owing to fiscal consolidation programmes in Trinidad and Tobago (-1.8 points of GDP), Suriname (-1.8 points), Barbados (-1.7 points) and Antigua and Barbuda (-1 point),” the report said.
The 232-page report said fiscal policies in the Caribbean continued to focus on generating primary surpluses to deal with the heavy burden of public debt.
“In this context, the average primary surplus is expected to rise from 1.1 percent of gross domestic product in 2017 to 1.9 percent of GDP in 2018, with a decline of similar magnitude in the overall deficit.
“Some countries in the sub region are implementing considerable fiscal adjustment, especially Trinidad and Tobago, which is aiming to reduce its primary deficit from 5.4 percent of GDP in 2017 to zero percent in 2018,” the document said.
It said governments’ public debt remained stable at 68.6 percent of GDP in the Caribbean in the second quarter of this year, similar to 2017 year end levels.
Inflation was about 2.5 percentage points in the non-Spanish speaking Caribbean as at April 2018.
Meanwhile, international reserves in the region continued to grow this year, although at a slower pace than in 2017, the report said, while pointing out that the gross debt issues by Latin American and Caribbean countries in international markets amounted to US$68.719 billion in the first six months of 2017, about seven per cent lower than the prior year.
Source: ECLAC Executive Secretary