NEW YORK, United States, October 30, 2008 – The Caribbean is being warned to expect harder times as the global slowdown begins to have a negative impact on the region.
The caution has come from the Economic Commission for Latin America and the Caribbean (ECLAC) which has predicted only a three per cent growth for the region next year and said that both the Caribbean and Latin America will see a drop in direct foreign investment, remittances and demand for its raw material exports.
According to the body’s ‘Latin America and the Caribbean in the World Economy’ report, the looming recession and current credit crisis also means that countries in the region will have to deal with restricted access to external financing, higher interest rates, tumbling stock exchanges and a shift of capital to safer destinations.
ECLAC has urged the region to work together to maintain fiscal policy, control inflation, diversify markets and reduce foreign debt.
“To avoid contagion from industrialized economies, governments must ensure liquidity in the financial system and reinforce prudent supervision of the soundness of the banks and financial institutions with the most links to international financing and risky operations,” the report said.
The good news, in the document, is that exports from the region are on track to grow at an estimated 23 per cent this year, despite the global financial crisis. It also said that the value of imports to the region will rise by an estimated 22 per cent, leading to an expected trade surplus of US$51 billion at the end of 2008.