Exports from the Caribbean grow more than world trade despite slowdown

The value of goods exports from Latin America and the Caribbean continued to grow in the first half of 2022, and though at a slower pace than in the same period of the previous year, it surpassed world trade.

The Inter-American Development Bank (IDB) has released the latest issue of the Trade and Integration Monitor which analyses the evolution of trade flows in Latin America and the Caribbean.

This confirmed that the value of the region’s exports increased by 20.6 percent in the first half of 2022, after growing 27.9 percent in 2021.

This growth rate exceeded that of world trade, which fell from 25.8 percent to 17 percent in the same period.

Exports slowed in response to a series of global shocks: the conflict in Ukraine, China’s zero-COVID policy, and the tightening of monetary policies.

Service exports—which had rallied by 26.8 percent in 2021—continued to grow steadily in the first quarter of 2022. They grew at an exceptionally high rate (53 percent), outstripping the world average, driven by the return of international travel and transportation.

Rising export prices accounted for almost 70 percent of the increase in value of external sales from Latin America and the Caribbean in the first half of 2022.

The report highlights the price dynamics of the region’s main export goods: for instance, the price of oil increased by 69.1 per cent, coffee by 60.6 per cent, and sugar by 14.4 per cent.

In the area of export volumes, growth slowed somewhat in the first half of 2022, but volumes increased by 5.3 percent.

This growth was slightly higher than the world average (4.5 percent), with performances varied within different subregions.

Imports slowed from 36.8 percent to 29.4 percent but continued to grow more than exports, driven mainly by energy prices.

The report underlines that although sales to the United States contributed most to the trade recovery in Latin America and the Caribbean, trade within the region was more dynamic than to the rest of the world (33.5 percent vs. 18.5 percent, respectively).

As a consequence, the share of intraregional trade rose by 1.4 percentage points in comparison with 2021, accounting for 15.8 percent of the total in the first half of 2022.

Over the last 10 years, exports from Latin America and the Caribbean have been less dynamic and more volatile. Aside from a few exceptions, the region’s economies have become less competitive externally, particularly in the intraregional market.

For Guyana specifically, exports did drop from 58.2 percent in 2021 to 23.5 percent for the first half of 2022. However, the country is projected to have significant economic growth in the near future.