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World Bank issues warning on Caribbean growth

images-Caribbean-World_Bank_Headquarters_803623381From Caribbean360

WASHINGTON D.C., United States – The World Bank has warned that growth in the Caribbean “will be held back” by large fiscal adjustments necessary to bring fiscal deficits to sustainable levels and help reduce public debt burdens.

“Growth in the Caribbean continued to disappoint, decelerating to 3 percent in 2012 as growth decelerated in the Dominican Republic and in Haiti, while Jamaica’s economy fell into recession,” said the Washington-based financial institution in its “Global Economic Prospects, June 2013.”

“Regional growth in the first quarter as approximated by industrial production softened, with industrial production remaining relatively flat, after a slight contraction in the fourth quarter,with growth decelerating to slightly below potential, the positive output gap nearly closed in 2012,” it continued

Overall, the World Bank said growth in the Latin America and the Caribbean region decelerated an estimated 1.4 percentage points to 3 percent in 2012.

In per capita terms, it said growth has fallen below 2 percent for the first time since the global crisis.

The decline in growth was partly due to “bottlenecks that constrained growth in some of the larger economies in the region, partly because of softening in global activity mid-year due to Euro Area uncertainty, and partly because of a decline in non-oil commodity prices.”

But even with gross domestic product (GDP) growth below potential in 2012, the report said the positive output gaps that opened during the recovery from the 2009 crisis “still persist or have only now closed.”

The World Bank said slower domestic consumption, in conjunction with weak external demand, caused economic activity to slow in many countries in the region, stating that  inflation rates in the region have remained “relatively anchored” for the most part, especially core inflation, “although they have remained stubbornly high or even accelerated in countries where economic output is at or near potential.”

The report said lower food and energy inflation also contributed to the decline in inflation in Central American economies, while inflation in some of the Caribbean economies was “low on account of weak domestic demand.”

The Bank pointed to strong domestic demand in many countries in the region and in some cases small or positive output gaps which led to a “worsening in current account positions in 2012.” (CMC)

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World Trade Organisation Director calls for closer Caribbean integration

From South Florida Caribbean News

PORT AU PRINCE, Haiti – Director General of the World Trade Organisation Mr Pascal Lamy has emphasised that the Caribbean Region needs closer integration.

Speaking at the launch of the Caribbean Community (CARICOM) Regional Aid for Trade Strategy in Port au Prince, Haiti on Tuesday, Mr Lamy said the strategy sought to build on the promise of a Region free of barriers by identifying transformative projects that support closer integration.

“The Caribbean needs closer regional integration. And as you celebrate the 40th anniversary of the signing of the Treaty of Chaguaramas this year, I think it is a fair question to ask how the Region can accelerate the pace which I witnessed some ten years ago when I was still the EU Commissioner and how it can honour the ideas of Williams, Burnham, Barrow and Manley — the founding fathers of the integration movement,” he added.

Mr Lamy said the best way to honour the architects of the Caribbean Community was to recommit to regional integration as the most successful and economically viable route towards greater and sustained development for the Region.

The Region, the Director-General said, had made some initial but crucial steps in concretising the role that Aid for Trade could play in its economic development. Mr Lamy identified Belize and Jamaica as having launched two excellent national strategies, both of which, he said, were profiled in Geneva, headquarters of the WTO, as examples of best practice.

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