Minister of Finance Camillo Gonsalves speaking at Wednesday’s press conference.

Countries in the Eastern Caribbean Currency Union (ECCU), who opted for lockdowns in response to the COVID-19 pandemic, have seen a dent in their economies but not the number of cases of the viral illness.

Minister of Finance Camillo Gonsalves made the observation at a press conference in Kingstown on Wednesday.

“I’m grateful to the leadership of the Honourable Prime Minister and, indeed, other members of the Cabinet for resisting the urge to have a knee jerk lockdown and complete halting of activity in the country,” Gonsalves said.

“Because now that the numbers are coming out, from various countries, two things are being observed: One observation is that the complete lockdown has not appeared to have changed the infection numbers significantly from one country to the next in the region.

“But the other number that’s coming out is that it has definitely affected the economies of those countries far more drastically than we have been affected, although obviously we have been affected,” Gonsalves said.  

He said the Eastern Caribbean Central Bank now suggest that economies in the currency union may shrink by as much as 16%.

“That would be the largest contraction in the regional economy, probably in recorded history. I’m not sure if there’s another example of the entire region contracting by that much,” the finance minister said.

“The prediction for St. Vincent and the Grenadines is not as severe — maybe in the order of 11%, as opposed to 16% because our economies are not as dependent on tourism as some of the other economies in the Eastern Caribbean,” Gonsalves said.

He, however, said that all indications point to increasing severity in the impact of the COVID-19 pandemic on the economies of the region, and others to which the regional economies are connected.

“And it makes it all the more important that the relief, the services and the bailout packages that were conceived in the government’s recovery and stimulus package are delivered as efficiently as possible to the people of St. Vincent and the Grenadines to help alleviate some of the difficulty that so many Vincentians are facing because of the economic slowdown,” Gonsalves said.

He noted that the United States economy contracted by 4.8% in the last quarter.

That ends the longest period of economic growth in the United States in history. And it contracted by 4.8% in the last quarter, but if you think about how COVID spread in the United States, January and February are fairly normal months in America and really things only started to tighten in April.

“So if the April month alone managed to sink the American economy by 4.8%, it sends an unsettling signal about where the global economy is going in this COVID crisis. The prediction [is that] unemployment will triple in the United States of America,” Gonsalves said.

He said that the prediction is that in the next quarter, U.S. economy will contract by double digits.

“And these things have a knock on effect on the economies of our region. The Economic Commission for Latin America and the Caribbean is predicting that the CARICOM economies will contract by about 6%,” Gonsalves said.