The CDB’s predictions said this growth will likely focus on service-exporting.
In a recent statement, the CDB said service-exporting BMCs such as the BVI are forecasted to gain momentum and grow at an average rate of 4.8 percent because of the continued inflow of tourists into the region.
The loan bank noted it is anticipated that this rebound is likely to strengthen during 2022 as COVID-19 restrictions are being eased on account of strengthened protective health measures.
However, the regional bank noted the return of international passengers to these service-exporting states is largely dependent on the acceleration of vaccination rates; effective management of the pandemic without resorting to full and lengthy lockdowns and continued confidence in the protocols established for safe travel into the region.
Meanwhile, Premier and Tourism Minister Andrew Fahie has repeatedly said the government will not be looking to enter another period of lockdown to deal with the threat of the pandemic.
Fahie has maintained that his government will try everything to rebound from the devastation COVID-19 has on the territory’s economy and this was spurred on by the resumption of the cruise ship industry late last year and the relaxation of COVID-19 protocols for visitors.
The Director of Economics at CDB Ian Durant said a key lesson from the impact of the pandemic is that countries that entered the pandemic on a strong macro-fiscal footing fared better in weathering the impacts and as a result, many countries are redoubling efforts to achieve debt sustainability despite the existing challenges.
“Many countries are implementing programmes to achieve sustainability with support from the international financial institution community, including from CDB. Others are doing so outside of supported programmes but have established explicit fiscal anchors to function as platforms for macroeconomic policy frameworks,” Durant said.
The growth predicted for 2022 is also underpinned by expectations of accelerated implementation of several large infrastructure projects across the region.
“Despite being a challenging year for the region, 2021 witnessed the continuation of a nascent regional recovery that began in the latter part of 2020,” the CDB Director of Economics highlighted.
“The combination of easing of border controls and internal lockdown measures and the continued implementation of fiscal stimulus programmes in some BMCs helped regional economies in recovering some of the lost ground in economic activity,” Durant added.
Service-exporting economies in 2021, according to the CDB, expanded by 3.2 percent, which was due to a rebound in two sectors — hotels and restaurants, as well as wholesale and retail trade — supported by an almost 10 percent increase in tourist arrivals between January and September, compared with the same period in 2020.
Durant explained that the impact of the pandemic exposed the structural weaknesses that have caused the region’s acute vulnerability to global economic shocks. Consequently, while the pandemic had an impact globally, there is no doubt that the high level of export concentration, which is a direct result of the structural weaknesses in the region, amplified the impact of the pandemic across the Caribbean.
Stressing that recovery efforts need to be consistent with the longer-term repositioning of the region’s economies, the CDB Director of Economics said this was necessary to reduce these vulnerabilities.