This country’s economy is expected to grow by 3.2 per cent this year, the Economic Commission for Latin America and the Caribbean (ECLAC) has projected.
This is just under the average growth rate of 3.5 per cent anticipated for the Caribbean region if Guyana’s growth rate is not included, ECLAC stated.
Guyana’s economy is expected to grow by 37.2 per cent.
With Guyana’s growth included the Caribbean’s average is 9.1 per cent.
According to ECLAC the economies of Latin America and the Caribbean are facing a complex external scenario in 2023, marked by low growth in economic activity and global trade.
“In addition, the interest rate hikes carried out globally were compounded by the financial turbulence seen in early March, which has increased uncertainty and volatility in financial markets. Although inflationary pressures have slowed, monetary policy rates are expected to remain high throughout 2023 in the main developed economies,” it stated.
ECLAC stated that in this context of growing external uncertainties and domestic restrictions, the slowdown in economic growth to deepen in Latin America and the Caribbean in 2023, reaching a rate of 1.2per cent.
ECLAC stated that the region’s countries are facing limited space for fiscal and monetary policy once again in 2023.
“As in the rest of the world, inflation in the region is exhibiting a downward trend, and while the process of interest rate hikes in several of the region’s countries is expected to end soon, the effects of this restrictive policy on private consumption and investment will be felt more strongly this year, due to the lag time with which monetary policy acts. In addition, given the recent global financial volatility related to problems at banks in developed countries, and given that regional inflation is seen remaining high in comparison with pre-pandemic levels, a monetary easing cycle is not expected to take hold yet in the region,” it stated.
The United Nations regional commission estimates that all of the subregions will experience lower growth in 2023 versus 2022. South America will grow by 0.6 per cent in 2023 (versus 3.8 per cent in 2022); the group made up of Central America and Mexico will expand by 2 per cent (in comparison with 3.5 per cent in 2022), and the Caribbean (without including Guyana) will grow by 3.5 per cent (in comparison with 5.8 per cent in 2022).
In the Caribbean economies, the deceleration forecast for 2023 is due mainly to the fact that inflation has affected both real income—and with it, consumption—as well as production costs, with a negative impact on the competitiveness of exports, both of goods as well as tourism.