BRIDGETOWN, Barbados, CMC—The World Financial institution mentioned Wednesday that financial development within the Caribbean this 12 months shall be 1.9 p.c, growing to a “modest restoration” of two.6 p.c in 2025.
The World Financial institution’s Chief Economist for Latin America and the Caribbean, William Maloney, talking at a digital new convention the place the Washington-based monetary establishment offered its financial evaluation titled “Taxing Wealth for Fairness and Progress,” mentioned Guyana will proceed to steer the financial progress within the area.
When requested by the Caribbean Media Company (CMC) what pitfalls the Caribbean area may encounter within the new 12 months, Maloney mentioned they should diversify “to the higher use within the case of nations which might be exporting skilled labor to america and to different areas to make these extra sustainable fashions of growth reasonably than treating them as mind drain.
“It’s one thing I feel we have to be fascinated by, and I feel additionally to the diploma that we will develop renewable power sources, so we’re much less depending on power that may each assist us battle inflation…and make us extra unbiased”. Watch video
The World Financial institution report examines the area’s financial prospects, specializing in development and financial stability. Maloney discusses the function of wealth taxes in creating fiscal area and selling fairness and development.
He mentioned Guyana “clearly has a vivid future by way of income coming from petroleum, and I feel the problem goes to be to make use of these revenues appropriately in such a manner that we don’t drive overvaluation of the foreign money and drive inflation throughout the nation.” Watch video
He mentioned which means having a “well-run and unbiased Sovereign Wealth Fund,” including, “I feel that’s going to be a giant problem going ahead.
“I do know that the World Financial institution is working with Guyana to make sure that the event of those oil investments is environmentally pleasant,” he added.
In accordance with the World Financial institution, Latin America and the Caribbean (LAC) should capitalize on financial momentum to spice up development and the area’s improve of 1.9 p.c, barely exceeding earlier estimates.
The area is forecast to develop by 2.6 p.c in 2025. These are the bottom charges amongst all world areas, highlighting persistent structural bottlenecks.
In accordance with the World Financial institution figures, Barbados’s development is more likely to be 3.9 p.c this 12 months, growing to 2.8 p.c subsequent 12 months and a couple of.3 p.c in 2026.
Belize is predicted to register 4.3 p.c development this 12 months, dropping to 1.2 p.c subsequent 12 months and 0.5 p.c in 2026, whereas Dominica’s development shall be 4.6 p.c this 12 months, declining barely to 4.2 p.c subsequent 12 months and three.2 p.c the next 12 months.
In Grenada, the World Financial institution estimates development of three.2 p.c this 12 months, enhancing to 4.7 p.c in 2025 and 4.4 p.c the next 12 months.
Guyana’s financial development for this 12 months is estimated at 43 p.c, declining to 12.3 p.c subsequent 12 months and growing to fifteen.7 p.c in 2028. Haiti, which is gripped with a political and safety scenario, will register minus 4.2 p.c development this 12 months, 0.5 p.c the next 12 months, and 1.5 p.c in 2026.
Jamaica’s financial development shall be 0.8 p.c this 12 months, with the World Financial institution noting that development in 2025 shall be 2.2 p.c and 1.6 p.c in 2026.
St. Lucia’s financial development this 12 months is pegged at 3.4 p.c, declining to 2.6 [percent the following year and 2.3 percent in 2026, while St. Vincent and the Grenadines will have growth of five percent this year, declining to3.5 2.9 over the following two years.
Suriname, a Dutch-speaking Caribbean Community (CARICOM) country, will have economic growth of 2.9 percent this year, increasing to 3 percent and 3.1 percent over the next two years.
According to the World Bank, oil-rich Trinidad and Tobago will register growth of 2.2 percent this year, increasing slightly to 2.3 percent the following year before declining to 0.9 percent in 2026.
In its report, the World Bank said that the LAC region must seize the current momentum to accelerate growth. It noted that the United States Federal Reserve’s decision to lower interest rates is expected to provide some relief.
Inflation control is another positive development, thanks to the region’s effective macroeconomic management.
“The region has made strides in managing inflation and stabilizing its macroeconomic environment,” said Carlos Felipe Jaramillo, World Bank Vice President for Latin America and the Caribbean.
“This is a crucial moment to leverage these achievements to attract the investments necessary for sustainable development, foster innovation, build human capital, create more and better jobs, and empower the region to break free from this low-growth cycle,” he added.
The report highlights that public and private investments in LAC remain low, and the region must fully capitalize on nearshoring opportunities.
It said foreign direct investment (FDI) levels are below 13 years ago in real terms, with greenfield investment announcements favoring other regions.
Despite competitive wages compared to China and other destinations, high capital costs, weak education systems, poor energy and infrastructure, and social instability reduce LAC’s attractiveness as a nearshoring destination.
“Seizing LAC’s major windows of opportunity, the green transition and the nearshoring movement, requires structural reforms across the board to make the region more productive and competitive,” said Maloney.
“This will require generating more fiscal space, improving government efficacy, and reducing the tax burden on the productive sectors. This is a good time for the region to reconsider how its tax systems can best generate revenue while stimulating growth and advancing equity,” Maloney said.
According to the report, the debt-to-GDP ratio rose to 62.8 percent in 2024, up from 59.1 percent in 2019. High debt levels and servicing costs continue to hinder the region’s ability to create fiscal space for public spending and investment.
It said closing this gap is part of a broader development agenda that includes improvements in administrative capacity, spending, and revenue collection.
The report looks at different options countries can explore in this context and takes a deeper dive into wealth taxes to generate fiscal space, equalize incomes, and stimulate growth. Currently, the LAC has some of the highest statutory corporate taxes globally, averaging 24.7 percent, higher than the OECD average of 23.9 percent and Asia’s 19 percent. However, LAC collects only 2.7 percent of its revenues from wealth taxes, compared to 12.8 percent in North America and 4.3 percent in Western and Central Europe.
The World Bank said that revisiting property taxes also has a vital equity component.
It noted that the root of the property tax paradox in LAC lies not in the tax rates themselves but in outdated and inaccurate property valuations, which are sometimes less than 10 percent of market valuations.
“This leads to undervaluation, lower tax bills for landowners, and possible regressivity. Presumptive taxes, based on proxies like size, location, and property type, are often used to generate revenue, but they can also be inaccurate and inequitable.
“To address these challenges, LAC governments need to enhance their fiscal valuation systems, employing new digital platforms and modernizing cadasters to improve property mapping, data collection, and data sharing,” the World Bank said.
Download video – William Maloney, World Bank´s Chief Economist for Latin America and the Caribbean
Download video – William Maloney on Guyana
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