The Caribbean Development Bank projected two percent overall economic growth across its 19 regional borrowing member countries this year, as well as 2.2 percent growth specifically in the Virgin Islands, according to Dr. Warren Smith, the CDB president.
Dr. Smith and other CDB officials delivered presentations earlier this month at the bank’s annual news conference in Barbados. While there, they provided listeners with both a snapshot of the regional economy’s previous year and their forecast for the future.
“Despite projections of deceleration in global economic activity, the 2019 economic outlook for our [borrowing member countries] is positive,” Dr. Smith said at the event. “CDB is projecting that real GDP growth will be around two percent, as construction, tourism and the extractive industries, such as gold and oil, are expected to expand.”
While demonstrating significantly more economic growth than they did in 2017, Caribbean jurisdictions still lagged behind other parts of the world in 2018: Bank officials estimated the regional BMCs saw 1.8 percent growth last year, compared to an estimated 3.7 percent average globally.
“In 2018, the Caribbean region continued to face the challenges of low growth, high debt, and high unemployment, which have persistently resulted in weak social outcomes,” said Dr. Justin Ram, the CDB’s director of economics. “Such challenges are linked to inherent vulnerabilities related to size, trade concentration, poor governance, capacity shortages, rising crime and citizen insecurity. These factors have slowed transformation.”
There was some silver lining for the VI, however: Despite dealing with what CDB officials estimated was a 50 percent decline in visitor arrivals following the 2017 storms, the territory saw an estimated real gross domestic product growth of 2.3 percent in 2018 — something Dr. Smith attributed to “buoyant business and financial services activity.”
This year, the CDB plans to publish research assessing the vulnerability and resilience of its BMCs, according to Dr. Ram.
“CDB’s borrowing members can also expect to benefit from ongoing research on digital transformation and an analysis of regional energy markets, scheduled for publication later this year,” he said. “These two areas offer significant potential for transforming Caribbean economies.”