Regional growth slows, says CDB

Published: Friday September 12, 2008

REGIONAL economies were confronted by many challenges last year, says the Caribbean Development Bank (CDB), pointing also to the fact that economic growth slowed in nine territories while only four were able to sustain or increase economic activity.

In its 2007 annual report, the Barbados-based regional institution reported inflation due to rising oil and commodity prices, slower growth by major trading partners, depreciation of the United States dollar, and the high cost of intraregional travel, which topped the list of problems facing the region.

"As a result of these developments, regional growth was slower in 2007 than in 2006. The winding down of activity in the construction sector, generally slower growth in tourist arrivals, and a deceleration in agriculture output due to hurricane activity all contributed to the loss of regional growth momentum," the CDB report pointed out.

The financial institution noted that for the Caribbean as a whole, the economic growth rate fell from 6.9 per cent in 2006 to 3.9 per cent in 2007.

"Of the 13 CARICOM countries for which information is available, economic growth slowed in nine, and only in four did economic growth rates accelerate or remain constant. Deceleration was most pronounced in Antigua and Barbuda, Dominica, St Vincent and the Grenadines, and Trinidad and Tobago," the report added.

While explaining that Antigua and Barbuda and St Vincent and the Grenadines implemented transaction-based taxes in order to broaden their tax base, the CDB stressed that in context of slowing economic growth in 2007, regional revenue collections could not keep pace with rising recurrent expenditures on wages and salaries, subsidies and goods and services.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080911T230000-0500_140074_OBS_REGIONAL_GROWTH_SLOWS__SAYS_CDB_.asp