NASSAU, BAHAMAS — The World Bank is now projecting that the Bahamian economy will grow by 1.8 percent this year, a slight decline from its June 2023 projections.
The World Bank, in its Global Economic Prospects report for Latin America and the Caribbean, noted that in 2023, Latin America and the Caribbean experienced a significant economic slowdown, growing just 2.2 percent. This deceleration came in the context of heightened inflation and tight monetary conditions, weak global trade, and adverse weather events.
“The economic outlook for the region suggests a gradual recovery, with growth projected to increase to 2.3 percent in 2024 and 2.5 percent in 2025. While the lingering effects of previous monetary tightening will continue to influence near-term growth, their impact is expected to diminish. As inflation slows, central banks are expected to reduce interest rates, alleviating obstacles to investment growth, the World Bank reported.
The World Bank noted that excluding Guyana, which is experiencing a resource boom, Caribbean economies are expected to grow by 4.1 percent in 2024 and 3.9 percent in 2025, partly due to the ongoing expansion of the tourism sector.
Regarding risks the region faces, the World Bank anticipates that escalating geopolitical tensions, especially in the Middle East, could disrupt energy markets and cause oil prices to surge.
“Extreme weather events, intensified by climate change, present additional risks, particularly to climate-sensitive sectors such as agriculture, energy, and fishing. External factors and global trends also contribute to the risk landscape. Persistent core inflation in advanced economies could be accompanied by persistently high global interest rates, and constraining monetary and fiscal policies in the region. Furthermore, a sharper-than-expected slowdown in China’s growth could have notable spillovers to external demand, impacting the region’s commodity exports,” the World Bank noted.
