ANALYSIS OF ECONOMIC SHOCKS REVEALS POTENTIAL IMPACTS ON CARIBBEAN ECONOMIES

The growth of the non-oil sector is largely a contributor to the expansive Guyanese economy. Its projected growth at 56% in 2022, reflects that while the oil sector swiftly transforms the economy into one conducive to value-added produce, the non-oil sector is consistently achieving sustainable growth. The Headwinds Facing Post-Pandemic Recovery in the Caribbean: IDB Report 2022, however, urges Caribbean nations to remain bolstered against external shocks arising from food security, volatile fuel prices and fluctuating international interest rates. Key findings of the report were identified as the rising effects of commodity prices against terms of trade, ‘ rising inflation “imported” from commodity-price inflation,’ increased borrowing costs against reference costs, and the impact of price hikes on households and businesses. “Hopefully, these unfortunate external conditions will improve during 2023. As with natural disasters, however, it always prudent to prepare for the worst, even as we hope for the best,” said David Rosenblatt, the regional economic advisor for the IDB’s Caribbean Department. Surrounding the dimensions of the report, the authors suggest several key reform measures that may shield against negative macroeconomic effects, centred around fiscal consolidation and debt management with interventions aimed to tackle rising food and fuel prices.