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IMF sees growth in Caribbean in 2022

■ WASHINGTON

THE International Monetary Fund (IMF) yesterday said that the war in Ukraine is shaking the global economy and raising uncertainty about the outlook for Latin America and the Caribbean.

It said that the impact is being felt through higher inflation that is affecting real incomes, especially of the most vulnerable and that policymakers are reacting to this challenge by tightening monetary policy and implementing measures to soften the blow on the most vulnerable and contain the risks of social unrest.

'But there are other risks looming. A possible escalation of the war could eventually lead to global financial distress and tighter financial conditions for the region. In addition, the ongoing tightening of monetary policy in the United States, as the Federal Reserve takes a more hawkish stance, could eventually affect global financial conditions,' said the IMF Director for Western Hemisphere Department, Ilan Goldfajn.

According to the Washington- based financial institution, Caribbean countries last year recorded economic growth of between 2.8 and 4.7 per cent.

The IMF said tourism-dependent Caribbean countries like Antigua and Barbuda, the Bahamas, Belize, Dominica, Grenada, Haiti, Jamaica, St Kitts-Nevis, St Lucia and St Vincent and the Grenadines are predicted to record 3.2 per cent growth this year, declining slightly to 3.1 per cent the following year.

It said that in the case of countries like Guyana, Suriname and Trinidad and Tobago, classified as Caribbean commodity exporters, the economic growth will range from 20.2 per cent this year, dropping to 16.4 per cent next year.

Challenge for the region

Goldfajn told reporters that higher global and domestic financing costs can accelerate capital outflows and represent a challenge for the region, given large public and external financing needs in some countries and the limited resources to finance investment in the region.

'Any greater growth deceleration in China, because of the pandemic or other reasons, could also have an impact on key export prices and trade in the region,' he said, adding that all these risks cloud growth prospects for the region and require policy action.

Goldfajn told reporters that poverty and inequality remain key concerns in Latin America and the Caribbean given that the increase in inflation has an uneven impact on the population.

- CMC

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