“Global growth has slowed to the point that the global economy is perilously close to falling into recession.”
This is how the World Bank sentences its gloomy projection for this 2023, just three years after emerging from the recession induced by the 2020 pandemic. It calculates that world growth will slow down from the 3% forecast six months ago to 1.7%.
Despite the gloomy outlook, the agency projects that, among the largest economies in the Caribbean, growth in the Dominican Republic will average “a solid 4.9 percent in 2023 and 2024.” The percentage is slightly higher than the 4.6% forecast by the Economic Commission for Latin America and the Caribbean (Cepal).
Meanwhile, for Haiti, the World Bank forecasts that its economy will contract for the fifth consecutive year this year.
“It continues to be beset by violence and instability, with almost one in five children chronically malnourished,” the bank says of Haiti in its latest global outlook report released yesterday.
In Latin America
The World Bank points out that a marked slowdown in growth in Latin America and the Caribbean is expected to 1.3% in 2023, to recover a little, to 2.4%, in 2024.
“Somewhat slow growth in the US and China is expected to dampen export demand, while rising US interest rates likely mean financial conditions will remain tight,” he says.
To face a fall in investment, he suggests priorities. In countries with acute fiscal stress, it may be to improve the efficiency of public investment spending; in those with anemic private investment, it would be the reform of the business climate, to encourage private investment; and in those with large foreign direct investment, improve human capital to ensure that said investment improves growth.