Caribbean Economies Record Healthy Economic Growth For 2004

by Amanda Banks, Tax-News.com, London

11 February 2005

According to figures recently published by the Caribbean Development Bank, most Caribbean countries recorded healthy economic growth during 2004, despite the disruption caused by a spate of powerful hurricanes in the latter half of the year.

Thanks largely to activity in the tourism and financial services sectors, initial estimates suggest that the highest economic growth rates were witnessed in Anguilla, which grew by 12% in 2004, Trinidad & Tobago (6.7%), Antigua & Barbuda (5.1%), Belize (between 4% and 5%) and Kitts & Nevis (3.9%).

The CDB observed in a statement: “Tourism was the main driving force, supported by construction and to a lesser extent financial services, manufacturing and agriculture. These developments occurred within the context of only slightly higher inflation levels, as the effects of rising oil prices appeared to have been limited,”.

Elsewhere in the region, Barbados experienced growth of 3.9%, due mainly to strong performance in the tourism sector, while the British Virgin Islands grew by 2%, again due to a strong tourism sector, but also due to the strength of the financial services industry.

However, the CDB noted that growth in the Cayman Islands, the Bahamas and Grenada was constrained last year following a particularly active hurricane season.

According to the bank, the Bahamas’ economy expanded by 2.5% in 2004, down from an initial forecast of 3%, but still an improvement on 1.9% growth in 2003. However, the Grenadian economy, which was hit hard by the category five-rated Hurricane Ivan, contracted by 3.2% following 5.7% growth in 2003.

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