MOST CARIBBEAN countries recorded negative current-account balances for 2005, except Trinidad and Tobago whose exports climbed by over 20 per cent, mainly as a result of the increase in oil prices.
This was revealed in the United Nation's report World Economic Situation and Prospects 2006 launched yesterday. The report projects that the world economy will grow by slightly more than three per cent this year, following a similar pace in 2005 and moderating from the historically high growth rate of four per cent in 2004.
Latin America and the Caribbean continued to benefit from a favourable external environment, the report notes.
"The GDP of the region is expected to expand by about four per cent in 2006, similar to the economic performance in 2005, but well below that of 2004 when growth reached 5.6 per cent.
WELFARE IMPROVEMENTS
Despite the slowdown, the cumulative increase in GDP per capita would be around 10 per cent during 2004-2006, well above welfare improvements of the recent past," the WESP report states, noting that the moderation of the average growth performance was largely due to what is happening in the two major economies of Brazil and Mexico.
In contrast, the report states, fuel and mining exporters such as Trinidad and Tobago, Venezuela, Chile, Colombia and Peru sustained good macroeconomic performances in 2005.
In terms of the world outlook, the report states that down the road, the possibilities of new oil price surges, an outbreak of Avian influenza into a human pandemic, or a crash in house prices in key economies pose a threat to a smooth winding down of economic growth. But the greatest danger, according to WESP '06, may lie in the systemic weakness entailed in huge and still-growing global finance imbalances.
In the meantime, however, slower growth in the United States, stagnation in Europe and a modest return to expansion in Japan contrast with only a slight fall-off in strong economic performance by the developing countries. Benefiting from a favourable international environment of low interest rates, low inflation and strong commodity demand, the developing world is projected by the U.N. to grow by slightly more than 5.5 percent this year, following estimated 5.7 per cent growth in 2005 and 6.6 per cent in 2004.
"Growing at 6.6 per cent, the [50] least developed countries (LDCs) are faring even better, reaching the fastest average growth they have had for decades," says WESP 2006.
