Basseterre, Saint Kitts – Nevis – April 16th 2007 (CUOPM)
The Washington-based International Monetary Fund, while predicting lower
economic growth in the Caribbean this year and next, says St. Kitts and
Nevis will be among the best performers in 2007.
The IMF also said that Cricket World Cup could be a mixed blessing for the
region.
In its annual report , the IMF said the economies of 15 Caribbean countries
collectively should grow by 5.4 percent this year.
That’s down from the 8.3 percent real Gross Domestic Product of 2006.
The IMF forecast covers the nations that make up the CARIFORUM region – the
14 independent CARICOM States and the Dominican Republic.The IMF Fund forecasts that the best performers are likely to be the
Republic of Trinidad and Tobago (seven percent), the Federation of St. Kitts
and Nevis (six percent) and the Dominican Republic (six percent).
The IMF says the factors in determining performance this year include the
ripple effect of a sharper than expected downturn in the United States
economy and tighter global credit conditions.
It anticipates that things will be no better for most countries in 2008 with
overall growth expected at just over 4 percent for the entire region.
Meanwhile, the, the Washington-based multilateral lender said the
Caribbean’s inaugural hosting of the Cricket World Cup has been a boon to
the region’s economy. But it warned the party may end in a debt and fiscal
hangover.
Caribbean governments have spent about $250 million in the past two years to
build or upgrade stadiums and other infrastructure in the nine countries
hosting the March 5 to April 28 contest.
“Partly as a result of this expenditure, primary balances have deteriorated
in most countries, and average public debt remained over 100 percent of GDP
at end-2006 in host countries,” the IMF said in its semiannual regional
outlook.
South Africa, host of the 2003 Cricket World Cup, and Japan-South Korea,
venues for the 2002 FIFA World Cup, saw small long-term net positive effects
from their sporting events. But the consequences for the Caribbean are “unclear,
especially in light of the associated fiscal cost,” the IMF added.
“There is concern that the net effect of the CWC could well be negative in
light of its heavy fiscal costs and already high public debt burdens in the
region,” the report said.
“In general, Caribbean public investment has shown a relatively weak link
with growth, suggesting the need to increase the efficiency of these
outlays,” it said.
It added that the Caribbean’s long-term growth prospects hinge on marketing
itself as a tourist destination.