BELIZE CITY, Thurs. Feb. 8, 2018– The Caribbean Development Bank (CDB) released its 2017 Caribbean economic review and its 2018 outlook at an annual press conference held in Barbados on Wednesday this week. A review of the publication revealed that although several Borrowing Member Countries (BMCs) suffered from devastating events like hurricanes, last year there was an overall uptick in economic growth, to 0.6 per cent.
The publication informed that although there was some growth in 2017, the region continues to underperform when compared with other country groups. For the last nine years, the annual growth in the region has averaged 0.8 per cent, while in other small developing states, growth has averaged 4.8 percent.
Despite these shortcomings, the region’s economy is expected to grow by 2 percent this year as a result of increased global economic growth. That projected growth is not guaranteed, however, but it is attainable with “macroeconomic stability, increased competitiveness, improved human development and environmental preparedness,” stated the report.
A review of Belize’s individual performance revealed that Belize saw improvements as one of the major commodity exporters in the region. Following contractions in 2016, agriculture, and fishing bounced back marginally. There was also an increase in the number of tourist visitors, but the tourism industry saw a slight decrease in earnings as tourists opted for cheaper accommodations.
The publication revealed that manufacturing contracted as a result of lower oil production, and lower production of alcoholic and non-alcoholic beverages.
According to the document, Belize, which recorded an unemployment rate of 9.4 percent, led the list of countries which reported declines in their unemployment rate last year.
In terms of fiscal performance and debt, the CDB noted that fiscal conditions in the region deteriorated last year and public debt remained high. Furthermore, the average fiscal deficit of central governments worsened from 0.7 percent of their Gross Domestic Products (GDPs) in 2016, to 1.6 percent in 2017.
It was revealed that Barbados, Suriname, and Trinidad and Tobago received credit rating downgrades and so tightened their fiscal stance. That same tightening was done by Belize during the restructuring of its commercial debt last March. According to the publication, this led to our credit rating being upgraded, after it was downgraded in 2016.
While 13 of the 19 BMCs saw a decrease in their debt-to-GDP ratios, Belize saw an increase of 1.6 per cent. This indicates that our debt increased last year when compared to 2016.
A review of the region’s external performance revealed that the commodity-producing BMCs saw their external positions improved, while in other countries their positions worsened. Things improved slightly in Belize because of higher exports of sugar, bananas, and marine products. A cut in our importation bill also aided this improvement.
Our external reserves were also below, or close to the recommended threshold. A fall in exports and the settlement of payments for two previous utility nationalizations in 2016 were largely responsible for the increased pressure on our country’s reserves.
With a projected regional economic growth of 2 per cent for this year, the CDB is of the view that agriculture and fisheries will continue to recover and tourism will get back on track. It forecasts that construction will also continue, but public investments may be constrained because of debt restructuring.