Caribbean & Central America - March 2018 (ISSN 1741-4458)

*** RETURN TO GROWTH. The Caribbean Development Bank (CDB) is projecting regional growth of 2% for 2018 after an advance of just 0.6% in 2017. Separately, the Eastern Caribbean Central Bank (ECCB) is projecting growth of 2.2% for the sub-regional Eastern Caribbean Currency Union (ECCU) economies as they continue their recovery from hurricanes Irma and Maria in September 2017.

The adverse effects of the 2017 hurricane season were felt most obviously by Dominica, whose economy shrank by 6.4%. In 2018, however, the island’s economy is expected to grow by 6.9% due to reconstruction activity. Antigua and Barbuda, where the smaller of the two islands suffered damage to 95% of its building stock, is projected by the CDB to grow by 5.3% in 2018. There will also be strong reconstruction-driven recoveries in Anguilla and the Turks and Caicos Islands.

Growth in the wider Caribbean region in 2018 will be driven by a return to growth for Trinidad and Tobago, and by Jamaica’s projected growth of 2.3% (see below). Despite the uptick in growth, however, the CDB also emphasised the poor relative performance of the Caribbean compared with other small developing states. According to the CDB, since 2009 regional growth has averaged only 0.8%. The average for other small developing states is 4.8%. the CDB attributes the blame for this poor performance to fiscal profligacy and low productivity and competitiveness.

*** MINING AND TOURISM DRIVING JAMAICAN GROWTH. Jamaica’s Finance Minister Audley Shaw presented his 2018/19 Fiscal Policy Paper to parliament on 15 February. He projected growth for FY2018/19 of 2.5%, to be boosted by a projected 25% growth in mining and quarrying on the back of increased global demand for aluminium, and thus for alumina. The agriculture, fishing, and forestry sector is expected to grow by 7%, with the hotels and restaurant sector advancing by 4%. The electricity and water sector is projected to grow by 2.5% as a result of increased business activity and a growth in housing stock.

*** RECORD YEAR FOR TOURISM DESPITE HURRICANES. During 2017, a record 30m tourists visited the Caribbean, they in turn spent a record US$37bn, up nearly 3% on 2016 according to figures from the Caribbean Tourism Organisation (CTO). And, in another record, cruise ship passengers reached the 27m mark, with another 3% growth predicted for 2018.

This was the eighth consecutive year of growth for Caribbean tourism. The CTO says that tourism employs 14% of the region’s population, and in some islands, it represents up to 80% of the economy.

*** HEALTHCARE FOCUS FOR GRENADA ELECTION. Grenada goes to the polls on 13 March, and Prime Minister Keith Mitchell of the dominant New National Party (NNP), which currently holds all 15 seats in parliament, has made healthcare a centrepiece of his re-election campaign.

In a campaign speech at the end of February, Mitchell said: “We have watched our healthcare system in this country over the years – governments go, governments come. We have seen the fundamental problems…I want to tell you, in the next term of our government, starting March 14, we are going to move speedily to implement a National Health Insurance.”

This commitment follows the launch in November of the Grenadian National Health Insurance Secretariat. However, Mitchell gave no final implementation date for the new scheme.