The Caribbean Development Bank (CDB) has lent St. Vincent and the Grenadines US$11.3 million (approx. EC$30.1 million) as part of US$67 million in emergency loans to seven Caribbean countries, in the first instance, to finance the response to the COVID-19 pandemic.
On Monday, the CDB’s board of directors also approved loans of US$13 million to
Antigua and Barbuda, US$15 million to Belize, US$2.5 million to Dominica, US$5.9 million to Grenada, US$10.8 million to St. Lucia and US$8.2 million to Suriname.
“The provision of support to the seven countries to respond to COVID-19 and keep critical government services and operations running is urgent to halt the economic decline and minimise social hardship, while giving focused attention to the most vulnerable people,” says CDB President W. Warren Smith.
The emergency loans, made under CDB’s most concessional terms, will provide vital liquidity and increase governments’ fiscal space to allow these countries to promptly meet their urgent financing needs without diverting resources away from critical social expenditures or health emergency needs, the bank said.
The bank said Caribbean countries are especially vulnerable to the global outbreak due to their heavy dependence on tourism for income and employment.
According to CDB estimates, many of these countries, including those, which will be supported with emergency loans, will fall into recession this year.
Real gross domestic product will decline in St. Vincent and the Grenadines by 4.8%; Antigua and Barbuda, 1.5%; Belize, 5.4%; Dominica, 2.9%; Grenada, 10%; and St. Lucia 9.1%.
Suriname, heavily dependent on gold production and export, was also severely hit and the economy almost brought to a complete standstill. Its economy is forecast to contract by 3% in 2020.
“It is expected that the social impacts of the COVID-19 pandemic will be significant, stemming from an increase in unemployment, and loss of income and livelihoods, as well as substantial disruptions of social services, with women, female heads of households and children, persons with disabilities, indigenous peoples, and migrants as the most vulnerable groups,” the bank said.