IMF more optimistic about Jamaica, maintains growth projections
Washington, USA — The International Monetary Fund (IMF) still expects Jamaica to grow at 1.3 per cent in 2014.
In its latest World Economic Outlook, the international lender reaffirmed projections made in its previous report published six months ago.
The stable outlook measures up against several downward revisions to GDP projections across Caribbean economies and a 0.1 percentage point reduction in expected global growth.
Latin America and the Caribbean is expected to see 2.5 per cent growth this year, lower than the 2.7 per cent it registered in 2013 and 0.4 percentage points lower than the IMF,s projections in January.
The world is expected to grow by 3.6 per cent in 2014.
"Subdued Growth Economic activity in Latin America and the Caribbean is expected to remain in relatively low gear in 2014," said the IMF's April 2014 WEO report. "The Caribbean continues to face a challenging economic environment, marked by low growth, high indebtedness, and financial fragilities.
"Nonetheless, activity is expected to recover modestly this year in the tourism-dependent economies as tourism flows firm up."
IMF's chief economist Olivier Blanchard said the global economic recovery is gaining strength, although there are still risks to both advanced and emerging economies.
The IMF lowered its growth expectations for seven of the 15 Caribbean member states and maintained its projections for three, although Jamaica will still see the third slowest growth rate, after Barbados, which is expected to record a 1.2 per cent decline and St Lucia, projected to grow at 0.3 per cent.
On the other hand, inflation projections for 2014 show considerably lower consumer price movement than was expected for Jamaica last October -- 8.5 per cent compared to 9.4 per cent.
Just five of the 15 Caribbean member states are expected to see higher inflation this year, while nine countries are projected to see current account deficits widen by a greater amount than expected last October.
The international lender figures Jamaica's current account deficit will end this year at 8.6 per cent of GDP rather than the 9.7 per cent it projected in its previous report.
The IMF also figures the country's output in 2013 was higher than previously estimated.
The Statistical Institute of Jamaica (Statin) last month reported that Jamaica grew by 0.2 per cent last calendar year, while the IMF figures it came in at around 0.4 per cent.