By: Staff Writer
January 13, 2023
The Inter-American Development Bank (IDB) said in its Trade Trends Estimates: Latin America and the Caribbean report that exports from the Caribbean is up by 38 percent and better than the overall regional Latin American average of 18 percent, despite the slowdown lingering from 2022 and expected to further decelerate in 2023.
The report said: “Exports from Caribbean countries increased at an estimated rate of 38.0 percent in 2022, after growing by 44.4 percent in 2021. The United States accounted for almost two-thirds of the expansion, and the European Union contributed an additional third. Performance varied widely in the subregion. Exports continued to contract in Suriname, while in Jamaica, they grew only slightly. Exports accelerated in Barbados and Belize and continued on growth path in Guyana, but at a lower rate than that observed in 2021. In Trinidad and Tobago, they continued to expand strongly.”
This export growth will depend heavily on how stable developed country markets are for the Caribbean and for Central America, maintaining stability with regional partners will play a key role. The Caribbean also
The report also said: “Even though the region’s export growth rate decelerated in 2022, it remained significant. The main driver for growth in exports from Central America was intraregional trade, while for Mexico and the Caribbean it was sales to the United States. Export values grew in every country except Suriname…”
Shipments from Central America grew by 13.6 percent. Exports from all the Central American economies grew at lower rates than in 2021 except Honduras. LAC itself and the United States accounted for three-quarters of the total growth.
The report added: “The value of Central American exports grew considerably, driven by intraregional flows, although they have slowed somewhat since the start of 2022. Finally, in the Caribbean, the pace of export growth continued at comparatively high rates, but with considerable heterogeneity within the region and strong volatility throughout the year.”
What could also affect the rate of exports is the prolonged Russia/Ukraine conflict coupled with high inflationary pressure. Given that these influences are likely to continue into the coming quarters, prospects seem to be substantially skewed to the downside. Indeed, several risks may jeopardize the region’s trade performance.
The bank also warned: “In sum, at the start of 2023, the region has already moved into a downward trend that looks set to continue, despite carrying over a relatively high year-on-year export growth rate. The short-term economic indicators point to a pattern of fragility that is connected with the downtrend in commodity prices, the slowing of growth in China, the risks associated with restrictive monetary policies, and the consequences of the conflict in Ukraine, while global logistics systems continue to be disrupted by the aftershocks of the pandemic. The balance of risks seems to be substantially tilted to the downside, and the leading indicator for the region’s exports confirms that the trend toward a slowdown will be consolidated in the coming months.
“Reversing this trend through reforms and investments seeking to boost competitiveness in foreign markets is key to shoring up the region’s economic recovery. At a time when LAC’s domestic markets remain weak, importing growth from the rest of the world through international trade will continue to be essential to overcoming the series of crises that have hit the global economy in recent years.