By: Staff Writer
October 15, 2021
The World Bank predicts strong growth in the Central American and Caribbean region in 2021 but not as strong as forecasts are predicting, with all of this being underpinned by vaccination policies across countries.
The bank in its semi-annual report for the Latin America and the Caribbean’s (LAC’s) region said that: “Economic recovery is stronger than predicted earlier in the year, but weaker than favourable tailwinds would dictate. Forecasts of 2021 growth have been upgraded over the summer and regional growth is expected to reach 6.3 percent for 2021, almost recovering the 6.7 percent losses of 2020. However, given the robust recoveries in their principal trading partners, low global borrowing rates, and the prospect of another commodity super cycle, growth rates might be expected to be 1.5 percentage points higher.”
The report also said, “Caribbean economies populate the bottom end of the growth distribution as they heavily rely on tourism flows that are recovering slowly. St Vincent and the Grenadines, Suriname, and Haiti, still recovering either from disasters or political upheaval, are expected to lose 6.1, 3.5, and 0.8 percent of GDP, respectively. The Bahamas, Barbados, Jamaica, Grenada and St Lucia are expected to grow between 2 and 3.5 percent in 2021.
“The economic rebound from the depths of the pandemic recession jointly with structural shocks to goods and services as well as labour markets, and disruptions to global supply chains, are starting to put pressure on prices in major economies like the United States and several emerging markets including Latin American and Caribbean economies. These inflationary pressures create domestic as well as external risks for the region.”
The ripple effect of short staffed factories in developed markets coupled with the shipping backlog that developed between the US and China is at the root of the higher than normal prices for consumer goods.
With regard to COVID-19 vaccination policy for the region is something the bank remained visibly cautious about with regard tp the vaccination rate across the region despite seeing significant improvement. The bank said: “Latin America and the Caribbean (LAC) is recovering from the COVID-19 crisis. Vaccination rates have steadily risen, and mortality rates are progressively under control after a tragic loss of life at a scale incomparable in memory, and among the most heart-breaking in the world.
“The pressure on health facilities is slowly relaxing, and school doors are reopening. Matching the health impact, the 2020 economic downturn in the region was the deepest in this century and globally notable for its severity, especially afflicting the lower strata of society. But here, too, gross domestic product (GDP) forecasts have been revised steadily upward over the summer with favourable tailwinds offering opportunities for full recovery of 2020 losses.”
The report also cautioned that on the negative side, “the Central American and Caribbean countries report vaccination rates below 20 percent, and the share of the vaccinated population in these economies is increasing at a slow pace.”
It gets worse as the bank also reports, “In the first year and a half of the COVID-19 pandemic, Latin America and the Caribbean (LAC) experienced the highest death tolls among all developing regions despite most countries in the region imposing strict stay-at-home orders, closing most non-essential activities, and even imposing curfews.
“Some argue that the low effectiveness of these measures and the poor quality of data collected on death tolls across the region may explain part of this puzzle. However, World Bank calculations of “excess mortality”—the number of deaths above what is usually expected at that time of year—place Latin America (LA) substantially above other regions of the world after January 2021.”