World Bank predicts Jamaica will show 2% economic growth this year

William Maloney, the World Bank’s Chief Economist for Latin America and the Caribbean stated that Jamaica s set to show 2% economic growth this year. The figure is expected to drop to a healthy 1.6% next year and maintain that position in 2026 as well.

Maloney gave a statement in which he highlighted that Jamaica has done an excellent job of managing external debt, which can be attributed to the consensus mechanism employed by the nation a few years ago.

This mechanism is responsible for bringing multiple interest groups under one banner, with a specific focus on stabilizing debt levels and fiscal debt. These efforts have had an immensely positive effect on Jamaica’s economy by bringing down debt levels at a consistent rate, year on year.

From Maloney’s perspective, this is the perfect way to facilitate growth and reduce poverty in the long run, thus establishing the economy of Jamaica on firmer footing.

Prime Minister Andrew Holness was quite clear about his intentions when he said in February that Jamaica is aiming to decrease its debt-to-GDP ratio to 74% by the time March 2024 comes to an end.

This is a great aim for the nation as it would be the lowest figure achieved by Jamaica in the last 25 years, which means it will be lower than pre-pandemic levels as well.

The World Bank also spoke of Barbados, stating that 3.7% growth will likely be recorded by the island this year, declining to 2.8% nest year and 2.4% in 2026.

Maloney added that even though it is slightly more difficult to get comprehensive data on the Caribbean, from their estimations, poverty levels in the region have compared well to other parts of the world, which is being received as a positive sign.

With that in mind, Maloney shifted his focus to Guyana, urging the President Irfaan Ali led government to make sure that the oil reserves which Guyana has discovered recently are monetized in the appropriate manner, so that they can benefit the entire population of the nation instead of a select few.

He stated the following, “One is to ensure that this new oil wealth will actually get to the people who need it and I would say in particular in the building of human capital so that the economy can diversify over time.”

“The second is to ensure that we find ways of using these revenues so that we build a more diversified economy. This requires a set of institutions that know how to keep the right amount of resources, the revenues off shore, the Sovereign Welfare Fund so it can maintain an exchange rate that is competitive.”

Maloney advised that institutions in Guyana have to show strength when it comes to engaging with the population and considering its demands, so as to ensure that the oil resources go where they rightfully should.

According to him, even though the World Bank is not officially involved in the oil sector in a direct manner, the financial institution is looking to consult on how institutions in the field should be established to facilitate transparency and growth.