World Bank Predicts 4.6% Growth for Barbados Economy in 2021, Emphasizes Digital Connectivity's Role in Economic Inclusion and Inequality

The World Bank is predicting growth of 4.6 per cent for the Barbados economy this year, followed by 4 per cent next year and 3 per cent in 2025.

The development bank gave the growth forecast in its latest report Wired: Digital Connectivity for Inclusion and Growth.

It is also predicting economic growth of 2 per cent for Latin America and the Caribbean this year and 2.5 per cent global growth.

Presenting the report on Wednesday, Chief Economist for the Latin America and Caribbean region William Maloney said digital connectivity had the opportunity to help fuel economic growth and productivity and help enhance citizen satisfaction with governance and increase inclusiveness in the region. However, he warned that if countries were not careful, it could also serve to exacerbate inequalities.

“Digital connectivity and the associated technologies are not a magic bullet . . . . Countries need to first of all, increase access, they need to understand why households that have access to connectivity don’t connect,” he said.

Maloney said countries need to look at where investments were needed to improve digital equality and put monitoring systems in place to see if objectives were being met or national strategies should be adjusted to ensure efficiency.

“Otherwise, digital technologies can actually exacerbate inequality and, at the very least, we won’t get what we want out of them,” he said.

Maloney said while the Caribbean has made significant progress in making connectivity and technology use more widely available and accessible, some people still lacked digital literacy and for others, not connecting was a matter of affordability.

As it related to the economic indicators, Maloney said while the region continued to make strides in some areas, it remained sluggish in others such as wage growth, overall economic growth, and the lowering of debt.

“We have fully recovered the losses from the pandemic [as a region]. We are now 11 per cent above our 2019 levels of GDP. Unfortunately, we are the slowest recoverers in the world,” he said.

“Our forecast has changed a little bit but it is worth highlighting there has been a bit of volatility largely arising from what’s happening in the advanced countries,” the World Bank official said, adding that the region was also being impacted by how the China economy was performing, interest rates in advanced economies, and international commodity prices.

He pointed to low rates of capital investments and low productivity as contributors to long-term structural problems, as well as sluggish wage increases that were affecting overall growth rate.

However, Maloney said inflation was abating due mainly to value chain normalising, stabilisation of food and fuel prices, and quick action by regional central banks. (MM)