Slow Recovery
May 1, 2011
Most of the Caribbean is waiting for developed markets’ economies to improve, but high oil prices threaten the tourism-dependent and highly indebted region.
Keywords:
KPMG
Colliers PKF
Moody’s
Caribbean
Cayman Islands
by Taina Rosa
The Caribbean is seeing a glimpse of a recovery in tourism, but activity is still not strong enough to get the region’s economy growing. With tourism accounting for about 41% of the Caribbean’s GDP, according to Citi estimates, local economies are still waiting for improvements in developed markets to jumpstart the flow of dollars to the region.
So far, that has not happened, and risks remain. “Tourism is very dependent on employment conditions, mainly in the US, Canada and for some countries like Barbados, the UK,” says Gabriel Torres, vice president and senior credit officer at Moody’s. “These countries’ [employment figures] have improved, although they are still kind of sluggish,” he says.
That does not mean that tourism is not recuperating at all. Data from the Caribbean Tourism Organization (CTO) show that in 2010, airline arrivals...
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