World Bank predicts higher JA growth
The World Bank in a just released report revised upward the growth prospects for Jamaica in the context of a downward revision for the region until 2016.
It’s rare for a global report to actually improve the growth prospect for the cash-strapped island.
Jamaica is now projected to grow at 1.1 per cent in 2014, 1.3 per cent in 2015 and 1.7 per cent in 2016 according to the Global Economic Prospects report published this month.
In January, the World Bank projected the island to grow by one per cent, 1.2 per cent and 1.3 per cent respectively.
The Latin America and Caribbean (LAC) on a whole, however, received a downward revision based on reduced growth prospects in larger economies.
“For the entire region, the forecast in January was 2.9 per cent and now it is a whole percentage point lower or 1.9, much of it due to external factors,” stated the report. “Since the previous GEP in January, growth projections for most LAC countries (except Bolivia, Colombia, Dominica Republic, Ecuador, Nicaragua and Panama) have come down, in some cases significantly (Argentina from 2.8 to zero, Brazil from 2.4 to 1.5, Mexico from 3.4 to 2.3 per cent).”
The report’s executive summary indicates that developing country growth will not be more robust in part because most developing economies are already fully recovered from the crisis and growing at close to potential. Moreover, in the medium term, global financial conditions will tighten, stated the report.
“However, given substantial further credit easing in the Euro Area, when that tightening will occur has become less certain. Other factors arguing against a more buoyant acceleration include restructuring in China, a gradual move towards a more neutral policy stance in developing countries and, for commodity exporters, stable or even declining commodity prices,” stated the report.
The head of the International Monetary Fund, Christine Lagarde, will lead a delegation to the island at month end to discuss the ensuing loan agreement with Jamaica, ultimately aimed at increasing the island’s growth prospects.
