PORT-OF-SPAIN, Trinidad, CMC:
CARIBBEAN ECONOMIES grew by nearly two per cent last year, fuelled mainly by the services sector, and more specifically by tourism, according to figures released yesterday by the Trinidad-based United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
It said that the economic growth in 2003 was 2.8 per cent compared with one per cent the previous year, even as it pointed to "significant disparities in gross domestic product (GDP) growth among the countries."
ECLAC said that at the lower end of the spectrum, Guyana and the British Virgin islands registered economic downturns of 0.6 per cent and 1.9 per cent respectively, while at the higher end, Antigua and Barbuda, Grenada and Suriname significantly increased their growth rates in 2003 by five, 5.7 and 5.6 per cent respectively.
"However, the overall growth divergence narrowed. For 2004, it is commodity-based econo-mies such as Suriname and Trinidad and Tobago that are expected to grow by at least six per cent," ECLAC said.
FIGURES COMPILED
BEFORE HURRICANES
The UN organisation said that the figures were compiled before the passage of the hurricanes Ivan, Jeanne and Charley that severely affected the region.
It said the tourism sector's performance in 2003 is a direct expression of the strengthening of the global travel industry following the September 11 terrorist attacks in the United States.
"Recovery also reflected the contribution to aggregate growth of primary sector activities, such as energy in Trinidad and Tobago and minerals in Suriname. Primary sector activities benefited largely from the increase in the international commodity prices."
ECLAC said that Caribbean countries experienced improvement in their fiscal accounts largely through restraint in government expenditure.
It said five countries, Belize, the Bahamas, Guyana, the Netherlands Antilles and St. Lucia proved to be the exception to this trend.
DISPARITY REMAINS
EXTREMELY HIGH
"Despite fiscal consolidation efforts, the disparity among Caribbean countries remains extremely high for an area whose ultimate goal is monetary and economic union. At one extreme, Trinidad and Tobago exhibits a fiscal surplus equivalent to 1.4 per cent of GDP.
"At the other extreme, Belize, Guyana and the member states of the Organisation of Eastern Caribbean States (OECS) have fiscal deficits reaching levels of 10 per cent of GDP or greater."
ECLAC said that the public debt remains one of the main constraints to the economic development of the region. "The main challenge for the region in the next year is how to maintain or increase growth levels while at the same time containing indebtedness as well as inflation," ECLAC said.
