The International Monetary Fund (IMF) now expects T&T’s economy to decline by a massive 5.6 percent, this is a larger contraction than the Fund had originally predicted.
The IMF’s new forecst of the value of T&T’s real Gross Domestic Product (GDP) for 2020 reflect a 1.1 per cent higher rate of decline from what it originally projected in April of a 4.5 per cent contraction.
The projected fall in the country’s GDP by the IMF is however lower than the Finance Minister Colm Imbert predicted when he told the Parliament that T&T’s GDP would decline 6.8 percent.
In his budget presentation Imbert said: “Madam Speaker, T&T’s output is now projected to contract in real terms by 6.8 percent in 2020, with recovery driven by an emerging digital economy and a recovering global economy expected by 2022.”
The projected decline in T&T’s economy for 2020 is among the lowest in the Caribbean. In the supranational organization’s World Economic Outlook, October 2020 publication titled: “A Long and Difficult Ascent” many Caribbean countries, except Guyana (expected to grow by 26.2 per cent), were given deeper declining forecast when compared with T&T.
For example, the IMF indicated steeper declines for the Bahamas ( -14.8), Barbados (-11.6 per cent), Belize (-16 per cent), Dominica (-8.8), Grenada (-11.8 per cent), Jamaica (-8.6 per cent), St Kitts and Nevis (-18.7 per cent), St Lucia (-16.9 per cent), St Vincent and the Grenadines (-7 per cent) and Suriname (-13.1 per cent).
Nonetheless, while T&T’s downward projection for 2020 is not as deep as many other Caribbean countries, the IMF’s data signals that it is expected to grow at a slower rate when compared to most of the Caribbean countries in 2021 up to 2025.
T&T’s real GDP growth rate forecasts by the IMF is one of the lowest in the Caribbean for 2021 and 2025, with a projection of 2.6 per cent next year and 1.5 per cent in 2025.
Meanwhile, for the years 2020 and 2025 the growth expectation of other Caricom countries is Barbados (7.4 per cent and 1.8 per cent), Belize (8 per cent and 2 per cent), Jamaica (3.6 per cent and 2.1 per cent), St. Kitts and Nevis (8 per cent and 2.7 per cent) and St. Lucia (7.2 per cent and 1.8 per cent) .
For the region of Latin America and the Caribbean as whole, the IMF revised the size of the contraction upward from the June forecast of -9.4 per cent to -8.1 per cent. The region is expected to return to positive growth in 2021 with a real GDP projection of 3.6 per cent.
Concerning global growth, IMF economic councillor Gita Gopinath said: “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast.”
Gopinath indicated that the revision is driven by second quarter GDP outturns in large advanced economies, which were not as negative as the IMF had projected. The IMF’s October global growth outlook for 2020 stands at -4.4 per cent (-4.9 per cent in June) and 5.2 per cent in 2021.
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