Region faces heightened economic risks
The Caribbean is facing heightened economic risks, regional financial institution RBC (Caribbean) Financial Ltd has said.
In its June 2012 Caribbean Economic Report released yesterday, the bank highlighted latest reports from the International Monetary Fund and the United Nations World Economic Situation and Prospects, which projected downward growth outlooks for across the region. This projection was based on the region's heavy dependence on Europe and North America for tourism revenues, inbound remittances, foreign direct investment and aid.
The UN report gave a 2012 regional growth outlook of 2.4 per cent, and a 2013 projection of 4 per cent-a 0.2 per cent reduction of the previous forecasts. The report stressed that tourism-dependent countries will likely see subdued activity due to persistently high unemployment levels in developed nations. Development assistance to the region is also likely to decline in the coming years because of fiscal constraints in donor countries.
For Trinidad and Tobago, RBC noted the recent Central Bank "Repo" rate bulletin, which highlighted rising headline inflation driven by rising food prices; record high excess liquidity levels; and anaemic private sector credit growth.