IMF warns global economic slowdown could reduce tourism arrivals

IMF Mission Chief for Peru and Antigua and Barbuda, Leo Bonato speaking during the Antigua and Barbuda Chamber of Commerce and Industry’s Business Breakfast Forum held on Thursday. (Photo by Kadeem Joseph)
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By Kadeem Joseph

A slowdown in large economies could cause a decline in the number of tourists that frequent Antigua and Barbuda this year, an official from an International Monetary Fund (IMF) has warned.

IMF Mission Chief for Peru and Antigua and Barbuda, Leo Bonato said while there is expected to be some “recovery” in 2020, this will mainly be among emerging markets and developing economies.

He explained that based on the IMF’s records, global growth declined from 3.6 to 2.9 per cent in 2019, with advanced economies only growing by 1.7 per cent compared to 2.2 per cent in 2018.

Among the advanced economies that are seeing slowed growth are the United States (US), the United Kingdom (UK) and parts Euro area, he added.

Bonato said in 2020, the growth in the US is expected to “decrease even further”, with growth in the UK remaining “more or less the same” with “not much happening” in the Euro area.

The IMF official explained that advanced economies are the “most important” markets for tourism for Antigua and Barbuda.

“These economies are not still growing very well so that’s going to impact… there is a very clear correlation between how these economies are doing and how many tourist arrivals you have in Antigua and Barbuda,” he said.

“This means that from this side, your economy will not get a very strong stimulus.”

Bonato said, however, the figures for Antigua and Barbuda were last updated in January of 2020 and are presently being revised as the body continues its visit.

He said this possibility is based on the impact of “a lot of good projects that are in the pipeline” that the team is being informed about during their mission here.

“It’s not clear how many of them will actually materialise, but they are good projects that will give an impulse to the economy,” he said. “So probably we’re going to revise those figures up.”

Bonato was speaking during the Antigua and Barbuda Chamber of Commerce and Industry’s Business Breakfast Forum held yesterday.

Based on the IMF, the ‘Real GDP Growth’ year-over-year percentage for Antigua and Barbuda was 3.1 in 2017; 7.4 in 2018; 5.0 in 2019, with the projected figures for 2020 declining to an estimated 3.7 per cent.

Last year, the Economic Commission for Latin America and the Caribbean (ECLAC) projected that Antigua and Barbuda’s economy will grow by an estimated 6.5 per cent, but while delivering his New Year’s Address in January, Prime Minister Gaston Browne declared a projected 7.5 percent growth rate and $1 billion worth of private sector investment for the twin island.

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