By: Staff Writer
January 25, 2022
Exports for the Caribbean and Central America grew significantly with Caribbean exports being the strongest in the region says the Inter-American Development Bank in its latest report.
The IDB, in its recently released, “Trade Trends Estimates: Latin America and the Caribbean (LAC) – 2022 Edition,” said that while exports grew around the Latin American region, but for the Caribbean it is among the strongest.
The report said: “Exports recovered in every subregion of LAC. The recovery was strongest in South America and the Caribbean, driven mainly by improvements in commodity prices. In contrast, sales rallied significantly in Mexico and Central America in the first half of the year as a result of larger volumes being shipped but slowed markedly from July onward.
The report also said: “Exports from Central America grew by an average of 30.7 percent in 2021. The largest increases were seen in Panama, Honduras, and El Salvador (98.4, 46.8, and 34.0 percent, respectively), and in all countries, export values far outstripped those that preceded the impact of the health emergency. The subregion itself was the most dynamic destination and contributed significantly to the increase in Central American exports.”
Imports were also on the rise last year the report said, “Total imports from LAC grew by 37.8 percent in 2021, after having shrunk by 15.4 percent in 2020. Imports also outperformed prepandemic levels, despite the slow, uneven recovery of the region’s economies.”
This means that economies are rebounding from the economic shock of the COVID-19 lockdowns as people whip out their wallets to get the things they could not have gotten in 2020. However, this rise in imports is also putting pressure on the supply chain as container ships are still backed up and logistics companies are still struggling to find truck drivers and transport personnel to keep with the demand worldwide.
The report also said: “Higher commodity prices were the main factor behind the rebound in the region’s exports in 2021. The economic recovery, driven in part by fiscal and monetary stimuli in advanced economies, and the depreciation of the US dollar have played a key role in the evolution of prices. However, these factors are set to reverse, and in some cases prices have already returned to a downward trend. Nevertheless, prices are still at record high levels.”
This commodity price increase was seen in goods like sugar, coffee and soybeans, with only coffee being particular to the Caribbean in Jamaica, Haiti and Venezuela.
The report also said: “In 2021, the volume of exports from LAC increased by an estimated 10.9 percent after declining by 6.1 percent in 2020, taking them to levels above those recorded before the pandemic. While the momentum was strongest during the second quarter, export quantities continued to expand in the second half of the year, albeit at a slower pace.” However, Colombia and Venezuela showed little to no improvement in exports the report added.
The IDB’s report also showed a greater reliance on intra-regional trade with countries within the LAC opting to trade more with one another. However, the more notable Western-Hemispheric trade partner in the USA fell off and their share of LAC imports declined significantly in 2020 but made a significant rally in the second quarter of 2021. China remained steady throughout the pandemic the report highlighted as well as LAC countries getting more market share in China, growing from 7.9 percent in 2019 to 8.3 percent in 2021, showing that China is becoming an increasingly important trade partner for the LAC.