Posted: Wednesday, June 8, 2016. 4:32 p.m. CST
By BBN Staff: The World Bank, in its latest economic prospects report, downgraded its 2016 global growth forecast to 2.4 percent from the 2.9 percent pace projected in January. And though the global outlook is not good, Belize and other countries in the Caribbean and Central American region are expected to see meager GDP growth.
According to the World Bank, the downgrade is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.
The World Bank has predicted a 0.8 GDP growth for Belize in 2016, 1.8 in 2017 and 2.2 in 2018.
The report also noted that poor weather conditions and drought took a toll on Belize’s agricultural production over the last year and affected the country’s output.
Latin America has contracted mainly because of struggling economies in Venezuela, Argentina and Brazil. Mexico, Central America and the Caribbean, however, have registered relatively stronger growth due to their close economic ties to a steadily growing United States, the World Bank said. The Caribbean in particular has benefited from a booming tourism industry, it added.
Despite strong tourism, growth in the Caribbean region will slow in 2016, the report noted, representing a normalization from a bumper year in 2015. Major tourism-associated construction is winding down, and a number of Caribbean economies are pursuing fiscal consolidation to strengthen public finances and lower heavy public debt burdens, it said.
While the Zika virus outbreak poses a substantial downside risk, tourism is expected to continue to expand and support growth. Fiscal consolidation in several Caribbean countries will weigh on growth in the medium-term, it added.
“This sluggish growth underscores why it’s critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty,” World Bank Group President Jim Yong Kim said.
“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices.”
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