Grenada to remain leading economy in 2019: CDB

The Barbados-based Caribbean Development Bank (CDB) said despite projections of deceleration in global economic activity, the 2019 economic outlook for its borrowing member countries (BMC) is positive.

Grenada which was the leading economy in 2018 is expected to remain in the top spot in 2019, an indication that St Kitts and Nevis has lost its top spot as the leading economy since the Timothy Harris Unity Government assumed office in 2015 and is not even among the top three. The growth rate in St. Kitts and Nevis has declined from over six percent in 2013 and 2014 to an estimated 2.7 percent in 2018.

Both the Basseterre-based Eastern Caribbean Central Bank (ECCB) and the Washington-based International Monetary Fund (IMF) have projected a growth rate for St Kitts and Nevis of 2.7 percent for 2018, although Prime Minister Harris had told the country last year it was just over 5 percent.

Dr Harris has also denied nationals and investors of knowing the true state of the St Kitts and Nevis economy as he continues to block publication of the Article IV Consultation by the International Monetary Fund (IMF) following the visit of an IMF Mission team to St Kitts and Nevis in June/July 2018.

“CDB is projecting that real GDP (gross domestic product) growth will be 2.1 per cent, as construction, tourism, and the extractive industries, such as gold and oil, are expected to expand,” the CDB said in a “Regional Economic Summary 2018,” released here.

“The expectation is that all but one of the BMCs will grow, once again led by Grenada. The rate of growth will be higher in Guyana, as the country prepares for commercial oil production starting in 2020. The one exception is Barbados, where the level of activity will remain the same,” said the region’s premier financial institution.

The CDB said that economic performance in the Caribbean is set against a background of slowing global economic growth and that the current international economic environment is characterised by escalating trade tensions, volatile commodity markets, and policy uncertainty with respect to both BREXIT and United States trade.

“In spite of all these developments, in 2018 most of CDB’s BMCs recorded positive economic growth. Growth averaged 1.9 per cent, an improvement on 0.5 per cent in 2017. The fastest growing economies were Grenada (5.2 per cent), Antigua and Barbuda (3.5 per cent) and Guyana (3.4 per cent). For Antigua and Barbuda and some of the other BMCs that were affected by the 2017 hurricane season, reconstruction efforts contributed to their upturn,” the CDB said.

Overnight visitor arrivals increased by 15 per cent in Belize, and by about 10 per cent in the Cayman Islands and in Grenada. In the commodity exporting countries, higher oil production and prices drove increased growth in Suriname and in Trinidad and Tobago.

Rates of unemployment fell in some BMCs, but rose in others. In Jamaica, unemployment fell to a record low in 2018, on the back of greater macroeconomic stability and improvements in the doing business environment.

However, across the region, unemployment rates were generally higher for women than for men, and the rate of youth unemployment remained worryingly high, with about one in five young people seeking but unable to find employment.