(By Ernesto Cooke) – The World Bank is forecasting St Vincent and the Grenadines economy will see a growth rate of 0.2 per cent this year and 5.0 per cent growth in 2022.
The projection is contained in Renewing with Growth, a World Bank report on Latin America and the Caribbean.
According to the World Bank Vincent and the Grenadines will also achieve a growth rate of 3.2 percent in 2022.
The Bank said GDP contracted by 4.2 percent in 2020, following pandemic-induced shocks and the sudden stop in tourism.
In its report, the Bank stated that poverty is expected to have increased due to the economic contraction and a drop in household income.
After several years of minimal budget deficits and primary surpluses, the Covid-19 economic shock will exert pressure on public finances, the report stated.
Significant public investment, including the port and a new hospital, will pose fiscal challenges as well. The risk of debt distress remains high, the stated in its report.
Public debt to GDP will stand at 87.9 in 2021, and projected at 90.8 in 2022.
The region suffered more health and economic damage from the COVID-19 pandemic than any other region, the report said.
But it declared that there was potential for significant transformation in key areas, adding that the immense disruption from the pandemic may lay the groundwork for higher productivity through economic restructuring and digitization.
“The damage has been severe and we’re seeing a lot of suffering, particularly among the most vulnerable,” said Carlos Felipe Jaramillo, World Bank Vice President for the Latin America and the Caribbean region.