Caribbean Countries Dependent on Tourism Recovering – IMF Study

The latest Wold Economic Outlook published by the International Monetary Fund, IMF, says the tourism dependent economies of the Caribbean have started to see a recovery in tourist arrivals.

But the IMF warns that long-standing competitiveness gaps, high public debt and financial sector fragilities, remain pressing concerns where the recovery of these economies is concerned.

The April edition of the IMF’s World Economic Outlook says risks around this subdued outlook for tourism dependent economies like Jamaica are considerable.

It says activity in the region’s commodity exporters might weaken further, in the face of adverse shocks, notably a sharper-than expected investment slowdown in China.

The IMF says further declines in commodity prices would bolster net importers, especially in Central America and the Caribbean.

But according to the IMF there is a caveat to this outlook.

The caveat is that many of these economies currently obtain concessional financing from Venezuela on part of their oil imports.

It says a possible curtailment of the Petrocaribe support from Venezuela could put pressure on public finances in some Caribbean countries.

Meanwhile the IMF says growth in the Latin American and Caribbean region slowed to 1-point-3-percent in 2014 and is projected to soften to an even lower rate in 2015.

This was the fourth consecutive year of a growth slowdown in the region.

The IMF says low business and consumer confidence in Brazil and the intensifying economic crisis in Venezuela may further weigh down the near-term outlook for the region.

With no apparent impulse for a near-term pickup in activity and the prospect of persistently lower commodity prices and reduced policy space in many economies, the IMF says regional growth is now projected to dip below 1-percent in 2015.