24th
January 2012
Economic
Challenges Ahead
One
of the more popular slogans of the St
Lucia Labour Party during the 2011 election
campaign was the phase, “Better
days are coming”.
But this may turn out to be easier said
than accomplished, when one takes into
consideration what the World Bank’s
newly release Global Economic Prospects
(GEP) January 2012 says about the Caribbean.
According to the GEP the world economy
has entered a dangerous period, in that
some of the financial turmoil in Europe
has spread to developing and high-income
countries, which earlier had been unaffected.
Europe itself appeared to have entered
into recession. Taking into consideration
Saint Lucia’s second largest tourism
market is Europe, it looks troubling for
the country.
The situation gets worse. The World Bank
report notes that developing countries
are more vulnerable now than in 2008 and
that they will have to search increasingly
for growth within the developing world,
a transition that has already begun …
but which is likely to bring with it challenges
of its own.
One of the most positive elements of the
recession of 2008/2009 was the speed with
which developing countries exited the
crisis. However, this time, developing
countries look to be more vulnerable if
there is a sharp deterioration in global
conditions, notes the GEP.
It was pointed out that by 2010, 53 percent
of developing countries had regained levels
of activity close to – or even above
– estimates of their potential output.
The January 2012 World Bank report notes
that growth in the Latin American and
Caribbean region is slowing after robust
growth in the first half of 2011. It added
that in the Caribbean economies, growth
remained weak with the output gap still
negative.
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