Expect lower growth — IMFWednesday, October 09, 2013
THE International Monetary Fund (IMF) shaved growth projections for Jamaica this year.
The multilateral expects the economy to grow by 0.4 per cent this year, according to its latest World Economic Outlook (WEO) published on Monday, compared to its April estimate of 0.5 per cent.
On the other hand, the international lender increased its growth forecast for next year — 1.3 per cent compared to the 1.2 per cent it projected earlier this year.
Nevertheless, Jamaica's growth will significantly trail the Caribbean at 1.7 per cent and the wider Latin America region at 2.7 per cent in 2013, although, when disaggregated the economy is expected to do better than Barbados, which is expected to decline by 0.8 per cent and St Lucia, for which growth is projected at 0.2 per cent this year.
Back in April, the IMF forecast 0.5 per cent growth for Barbaods and 1.1 per cent growth for St Lucia.
What's more, growth projections for Dominica, the Dominican Republic, Guyana, Haiti and Trinidad and Tobago were all lowered in the latest WEO report, even though Guyana and Haiti are expected to remain among the top three growing Caribbean nations (at 5.3 per cent and 3.4 per cent growth, respectively).
Suriname, for which the IMF increased its projection from 4.5 per cent to 4.7 per cent in 2013, is also in the top three.
Expectations for economic growth in Belize and St Kitts and Nevis remain unchanged at 2.5 per cent and 1.9 per cent, respectively, while growth forecast for Grenada and St Vincent and the Grenadines were each adjusted upwards by 0.3 percentage points to 0.8 per cent and 1.3 per cent, respectively.
"Activity will be weak in much of the Caribbean as tourism flows remain subdued and construction activity contracts," stated the latest IMF report. "High debt levels, weak competitiveness, and rising financial vulnerabilities continue to constrain fiscal policy and growth prospects. Overall, downside risks dominate the outlook."
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