IMF predicts country will see economic growth of 5.5 percent this year

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By Robert A Emmanuel

[email protected]

The International Monetary Fund (IMF) has released its April 2023 World Economic Outlook, projecting the twin island nation’s growth to be 5.5 percent in 2023, with a slight drop to 5.4 percent in 2024.

The report, entitled ‘A Rocky Recovery,’ claimed that Antigua and Barbuda will see a decline in real GDP growth in 2028, projected at 2.8 percent growth.

The World Economic Outlook report is usually published in April and October, and written using a “bottom-up” approach with IMF country teams generating projections for individual countries.

The IMF’s projected growth for Antigua and Barbuda is significantly lower than Prime Minister Gaston Browne’s reference to the Eastern Caribbean Central Bank’s (ECCB) estimated economic growth of 9.9 percent during the budget debate.

In 2022, an IMF team, led by Varapat Chensavasdijai, said that “Antigua and Barbuda’s economy is recovering, but output remains well below pre-pandemic levels”.

The team wrote in its preliminary findings, “Labour market disruptions, loss of tourism capital stock, and school closures during the pandemic may contribute to long-term scarring effects. Following a decline of 20 percent in 2020, real GDP is estimated to have expanded by 5.3 percent in 2021, buoyed by tourism and construction activity.”

They also wrote that they project that the country will recover from the economic effects of the pandemic in 2025, as they suggested efforts be fast-tracked to “centralise and digitise information and payment systems for social transfer programmes, to improve their coverage and targeting”.

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The latest growth projections from the International Monetary Fund (Image courtesy IMF)

Meanwhile, the Caribbean region is tipped to see an overall projected growth of 1.6 percent in 2023, 2.2 percent in 2024 and 2.3 percent in 2028.

Guyana was reported to have the largest economic growth in the region with 37.2 percent forecast this year, increasing to 45.3 percent next year.

Moreover, global growth was projected at 2.8 percent for 2023 and three percent for 2024.

The World Economic Outlook report listed recovery efforts from the pandemic, the war in Ukraine and rising inflation as some of the factors affecting projections.

“The global economy is yet again at a highly uncertain moment, with the cumulative effects of the past three years of adverse shocks—most notably, the Covid-19 pandemic and Russia’s invasion of Ukraine—manifesting in unforeseen ways,” it states.

“Spurred by pent-up demand, lingering supply disruptions, and commodity price spikes, inflation reached multi-decade highs last year in many economies, leading central banks to tighten aggressively to bring it back toward their targets and keep inflation expectations anchored.

“Although telegraphed by central banks, the rapid rise in interest rates and anticipated slowing of economic activity to put inflation on a downward path have, together with supervisory and regulatory gaps, and the materialisation of bank-specific risks, contributed to stresses in parts of the financial system, raising financial stability concerns.”

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