ECNETNews, October 9, 2024: The World Bank is calling on Caribbean nations to seize crucial opportunities and implement necessary structural reforms aimed at fostering sustainable economic growth. In its recent report titled “Taxing Wealth for Equity and Growth,” released today, the World Bank stressed the need for the region to prioritize fiscal reforms, boost investments, and leverage the potential of nearshoring to escape its low-growth trajectory.
William Maloney, Chief Economist for Latin America and the Caribbean, highlighted the importance of improving fiscal space, reducing tax burdens on productive sectors, and attracting investments through enhanced government effectiveness. He underscored that wealth taxes can serve as a vital tool for creating fiscal space and promoting equity across the region.
“While significant progress has been made in managing inflation and stabilizing the macroeconomic environment, further actions are necessary to enhance growth. This is a pivotal moment to draw in investments, stimulate innovation, and generate higher-quality employment opportunities,” said Carlos Felipe Jaramillo, Vice President for Latin America and the Caribbean.
Economic Growth Forecast for Selected Caribbean Nations (2024-2026)
| Country | 2024 Growth (%) | 2025 Growth (%) | 2026 Growth (%) |
|---|---|---|---|
| Barbados | 3.9% | 2.8% | 2.3% |
| Belize | 4.3% | 1.2% | 0.5% |
| Dominica | 4.6% | 4.2% | 3.2% |
| Grenada | 3.2% | 4.7% | 4.4% |
| Guyana | 43% | 12.3% | 15.7% (2028) |
| Haiti | -4.2% | 0.5% | 1.5% |
| Jamaica | 0.8% | 2.2% | 1.6% |
| St. Lucia | 3.4% | 2.6% | 2.3% |
| St. Vincent and Grenadines | 5% | 3.5% | 2.9% |
| Suriname | 2.9% | 3% | 3.1% |
| Trinidad and Tobago | 2.2% | 2.3% | 0.9% |
Key Recommendations from the World Bank Report
- Wealth Taxes and Fiscal Space: Caribbean nations are encouraged to rethink their tax systems to increase revenue while promoting growth, using wealth taxes as a means to tackle income inequality and create fiscal space for investments.
- Nearshoring Opportunities: Despite competitive labor costs, the region has not fully tapped into nearshoring opportunities, hindered by high capital costs, inadequate education systems, and poor infrastructure.
- Foreign Direct Investment: The report notes a decline in foreign direct investment and recommends addressing infrastructure and social stability challenges to better attract investment.
With expectations of declining U.S. interest rates, the World Bank views this as a significant opportunity for Caribbean economies to gain momentum and accelerate their development. Achieving this will necessitate a unified effort in governance and public investment reforms across the region.
