2017 CARIBBEAN ECONOMIC REVIEW AND 2018 OUTLOOK
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OVERVIEW The extreme vulnerability of the Caribbean Region was highlighted once again in 2017. Many of Caribbean Development Bank’s (CDB) Borrowing Member Countries (BMCs) were affected by the hurricanes that passed through the Caribbean in September. It will take considerable time for some BMCs to recover from the significant economic and social damage and losses they experienced. Notwithstanding the devastating events of 2017, there was an overall uptick in economic growth to 0.6%. The rebound in oil prices helped producers such as Suriname and Trinidad and Tobago, although they stayed in recession. However, higher oil prices also put unfavourable pressures on the external positions of many other countries. Fiscal balances remained weak in most cases, and public sector debt continues to be worryingly high in many BMCs.
Although growth returned in 2017, the Region continues to underperform in comparison with other country groups. Since 2009, annual growth has averaged 0.8%1; while in other small developing states, growth averaged 4.8%. Looking ahead, the Region is expected to grow by 2% in 2018, benefiting from a projected increase in global economic growth, but risks are tilted on the downside. Mitigating these risks will require improved resilience on many levels. Macroeconomic stability, increased competitiveness, improved human development, and environmental preparedness are all necessary conditions to improve resilience, and ensure sustainable, inclusive growth and development.
CHART 1: GROWTH (%) IN REAL OUTPUT, 2009-2017
Emerging market and developing economies Other small developing states World
Advanced economies
CDB Borrowing Member Countries
Comparable Country Groups - Real GDP Growth Rates Sources: CDB; International Monetary Fund (IMF) World Economic Outlook Database (October 2017)
1 Regional average real GDP growth was estimated at 1.0% when Trinidad and Tobago (which makes up about one third of BMCs’ total GDP) is excluded.
