CARIBBEAN-Latin America and the Caribbean experienced a significant economic downturn last year.

WASHINGTON, CMC -The World Bank said Tuesday that Latin America and the Caribbean (LAC) experienced a significant economic slowdown last year, growing just 2.2 percent.

In its latest “Global Economic Prospects” report, the World Bank said that this deceleration came from heightened inflation and tight monetary.

The Washington-based financial institution said the economic outlook for the region suggests a gradual recovery, with growth projected to increase to 2.3 percent in 2024 and 2.5 percent in 2025.

“While the lingering effects of previous monetary tightening will continue to influence near-term growth, their impact is expected to diminish. As inflation slows, central banks are expected to reduce interest rates, alleviating obstacles to investment growth.”

The bank said excluding Guyana, which is experiencing a resource boom, Caribbean economies are expected to grow by 4.1 percent in 2024 and 3.9 percent in 2025, partly due to the ongoing expansion of the tourism sector.

According to the bank, the Bahamas will register growth of 4.3 percent in 2023, dropping to 1.8 percent next year and 1.6 percent in 2025.

Barbados, which registered a growth of 4.6 percent last year, will record four and three percent growth over the next two years, while Belize’s 4.5 percent growth last year is predicted to fall to 3.5 and 3.3 percent in the next two years.

The World Bank said Dominica registered a growth of 4.9 percent last year and will record growth of 4.6 and four percent in the next two years, while Grenada’s 3.9 percent growth last year will dip slightly to 3.8 and 3.5 for the years 2024 and 2025.

The Financial institution said Haiti, which has registered a negative economic growth of 2.5 percent, will continue to record positive growth over the next two years of 1.3 and 2.2 percent, respectively.

Guyana, which recorded 29 percent growth last year, is predicted to register growth of 38.2 percent next year and 15.2 percent in 2025.

Jamaica’s economic growth of 2.3 percent last year is predicted to decline slightly to two and 1.4 percent over the next two years, while St. Lucia’s 3.2 economic growth in 2023 will decrease to 2.9 and 2.3 percent over the next two years.

The World Bank said St. Vincent and the Grenadines is expected to register a growth of 4.8 and 3.7 over the next two years, down from the six percent it recorded in 2023, while Suriname’s growth of two percent last year, is expected to grow 2.6 and three percent over the next two years.

The World Bank said that the region faces persistent challenges in the long term.

“The potential for economic growth is declining amid a slowdown in total factor productivity and an aging population.” “

The World Bank said risks beset the projected modest regional expansion. It said escalating geopolitical tensions, especially in the Middle East, could disrupt energy markets and cause oil prices to surge.

Extreme weather events, intensified by climate change, present additional risks, particularly to climate-sensitive sectors such as agriculture, energy, and fishing.

“External factors and global trends also contribute to the risk landscape. Persistent core inflation in advanced economies could be accompanied by persistently high global interest rates and constraining monetary and fiscal policies in the region.

“Furthermore, a sharper-than-expected slowdown in China’s growth could have notable spillovers to external demand, impacting the region’s commodity exports,” the World Bank added.

In the report, the World Bank said that as the world nears the midpoint of what was intended to be a transformative decade for development, the gross domestic product (GDP) growth in 30 years.

“By one measure, the global economy is in a better place than it was a year ago: the risk of a global recession has receded, largely because of the strength of the US economy. But mounting geopolitical tensions could create fresh near-term hazards for the world economy,” said the report.

It said the medium-term outlook has darkened for many developing economies amid slowing growth in most major economies, sluggish global trade, and the tightest financial conditions in decades.

Global trade growth in 2024 is expected to be only half the average in the decade before the pandemic. Meanwhile, borrowing costs for developing economies, especially those with poor credit ratings, will likely remain steep, with global interest rates stuck at four-decade highs in inflation-adjusted terms.

Global growth is projected to slow for the third year in a row, from 2.6 percent last year to 2.4 percent in 2024, almost three-quarters of a percentage point below the average of the 2010s.