Many Caribbean countries will experience a general decline in economic activity in the coming months in light of COVID-19’s impact, the Caribbean Development Bank (CDB) has stated.
In a release on the CDB’s website, the institution noted: “Many of these countries, including those, which will be supported with emergency loans, will fall into recession this year.”
The CDB indicated that Caribbean countries are especially vulnerable to the global outbreak due to their heavy dependence on tourism for income and employment.
The institution has already approved and is making available US $66.7 million for seven Caribbean countries to finance the response to the COVID-19 pandemic.
It also noted the bank’s board of directors has approved financing for Antigua and Barbuda (US$13 million), Belize (US$15 million), Dominica (US$2.5 million), Grenada (US$5.9 million), St Lucia (US$10.8 million), St Vincent and the Grenadines (US$11.3 million), and Suriname (US$8.2 million).
Commenting on the emergency loans, CDB President Dr William Warren Smith said: “The provision of support to the seven countries to respond to COVID-19 and keep critical government services and operations running is urgent to halt the economic decline and minimise social hardship, while giving focused attention to the most vulnerable people.”
The Development Bank highlighted that gross domestic product will decline in Antigua and Barbuda (1.5 per cent), Belize (5.4 per cent), Dominica (2.9 per cent), Grenada (10 per cent), St Lucia (9.1 per cent), and St Vincent and the Grenadines (4.8 per cent).
It also noted that Suriname, which is heavily dependent on gold production and export, was also severely hit and the economy almost brought to a complete standstill.
Its economy is forecast to contract by three per cent in 2020.
According to the statement, the emergency loans, made under CDB’s most concessional terms, will provide vital liquidity and increase governments’ fiscal space to allow these countries to promptly meet their urgent financing needs without diverting resources away from critical social expenditures or health emergency needs.
The CDB expressed that it expects that the social impacts of the COVID-19 pandemic would be significant, stemming from an increase in unemployment, and loss of income and livelihoods, as well as substantial disruptions of social services, with women, female heads of households and children, persons with disabilities, indigenous peoples, and migrants as the most vulnerable groups.
The CDB’s response to COVID-19 to date tops US$200 million, with US$140 million that can be used by the bank’s borrowing member countries to tackle the fallout of the pandemic as well as any other shocks to their economy and US$3 million for the purchase of personal protective equipment.