Caribbean Market Overview

Caribbean Market Overview: An Economic Review for Investors

 

Interested in an economic overview of the Caribbean Market? We provide the latest detailed information for Corporate and Investment clients in our quarterly review.

You can download the latest edition Caribbean Market Overview July 2024 >.

or read the Caribbean Economic Overview & Caribbean Market Review summaries  for a synopsis.

We encourage you to contact a Relationship Manager if you have any queries on Investment Banking in the Caribbean. Our team of experts is ready to assist.

Caribbean Economic Overview

 

Summary:

Global economic activity remained solid in Q1 2024 buoyed by the emerging recovery in Europe, and upside surprises in China owing to revival of domestic demand and exports. Among the region’s major trading partners, UK real GDP growth outperformed initial expectations, but real GDP growth in the US endured a sharper-than-anticipated slowdown, on the heels of a prolonged period of outperformance. Meanwhile, global disinflation continued, but persistent services inflation limited progress amid a faster reduction of goods inflation. US inflation, in particular, tilted upward in Q1, delaying the Fed’s easing of monetary policy, though cooling inflation since then signal that rate cuts are on the horizon. However, sustained progress saw UK inflation hit the Bank of England’s target in May, followed by its first rate cut in more than four years, in early August. Supply concerns associated with heightened geopolitical risk has led to increased uncertainty and price swings in energy markets – after climbing 17% in Q1, the price of West Texas Intermediate crude oil settled 12% lower by the end of July.


Early signs point to continued economic expansion in the Caribbean thus far in 2024, after most markets achieved their pre-pandemic level of output in 2023. A robust tourism performance alongside gains in construction output propelled economic activity in tourism dependents. After outstripping 2019’s total by 9% in 2023, stay-over arrivals to the region1 advanced 12.9% y/y in Q1 2024, though performance remained varied across individual markets. Turks and Caicos Islands, Curaçao and Sint Maarten continued to post the largest post-pandemic increases in arrivals – though arrivals to Sint Maarten are yet to recover to their pre-hurricane Irma (2016) levels – but arrivals to Dominica, Cayman Islands and St. Kitts and Nevis remained below 2019’s levels. Notably, arrivals to a few markets, including Barbados, Belize, Antigua and Barbuda, and St. Lucia outdid their pre-pandemic performances in Q1, after falling short overall for 2023. Cruise passenger arrivals also improved in Q1 (up 9.4% y/y) advancing on 2019’s total by 13%. Arrivals to The Bahamas continued to dominate, growing 17% y/y and accounting for a striking 31% of arrivals to the region1 aided by the redevelopment of the Nassau Cruise Port. However, arrivals to the Cayman Islands declined 14% y/y, largely attributed to the cruise port’s lack of facilities to accommodate some of the newer, larger cruise vessels and adverse weather that prevented vessels from making scheduled stops. In Guyana, economic activity broadened further propelled by the ballooning oil sector, with average daily production jumping to around 645,000 barrels, but persistently weak energy output likely limited the outturn for Trinidad and Tobago.


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