Outlook positive but analysts still cautious

Cautiously optimistic is the outlook for 2013. This was the word coming from Dr. Warren Smith, President of the Caribbean Development Bank (CDB), at a recent press conference at the CDB to discuss the review of 2012 for the region and outlook for 2013.

Last year ended on a sour note with a further downgrade for the CDB and the global economy continuing to flounder, resulting in a bleak outlook for the region. However, Dr. Smith highlighted that though there are challenges there are also opportunities going forward.

Dr. William Warren Smith, President of the Caribbean
Development Bank (CDB),  outlining the prospects for the region.

The CDB’s performance report stated, “The outlook is positive but remains subdued. The macroeconomic outlook for the region is conditioned by a number of factors. On the upside global recovery is forecast to continue with growth inching up to 3.5 per cent in 2013, albeit moderate recovery in the US and UK.

“In the Caribbean two additional set of issues – improving productive sector competitiveness and debt sustainability – will also shape the near term outlook.”

Smith warned, “Tourism-dependent economies will have to pay careful attention to airlift logistics and balancing the development of marketing efforts between new, traditional and potential markets. The region will have to be creative and collaborative in leveraging its combined efforts in accessing new source markets.”

“Beyond these issues the region must pay close attention to avoiding its own fiscal cliff through a gradual but deliberate reduction of its mounting debt stock.”

It was also said that “the region must also seek to build economic resilience by intensifying its economic diversification efforts. While a number of countries are exploring geothermal potential as a source of green power, as well as export expansion, these efforts must be deepened and broadened. Countries are also exploring opportunities within sector diversification, for example health, culture etc.”

The report also highlighted: “Growth in the region is expected to be positive for the most part. Guyana is forecast to lead the way with real GDP projected at around five per cent. Much of this activity is expected to be generated from stepped up public sector investment and from gains in the agriculture sector.”

Haiti is also expected to register strong growth on account of reconstruction efforts, together with improvements from gains in the manufacturing and agriculture sectors.

“Growth in the most of the Organisation of Eastern Caribbean States … is projected at a modest/moderate 1.2 per cent reflecting ongoing efforts at fiscal consolidation. Marginal growth of less than one per cent is projected for Barbados on the basis of an uptake in tourism based on anticipated growth in major markets. In Jamaica, output could be boosted by the outcome of IMF negotiations.” (NB)