World Bank says US trade policy affecting regional economic growth as inflation rate slows

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By Robert Andre Emmanuel

[email protected]

Antigua and Barbuda’s inflation rate has declined to its lowest level in over 14 months, with the Consumer Price Index registering a 4 percent year-on-year increase in February 2025.

This represented the smallest twelve-month inflationary increase recorded since December 2023, according to official data released Wednesday by the Statistics Division.

The monthly data revealed that consumer prices declined 0.4 percent between January and February 2025.

According to the latest report, food and non-alcoholic beverages, which comprise nearly 18 percent of the consumer basket, demonstrated mixed performance with an overall 1.8 percent year-on-year increase.

CDB President Daniel Best addresses delegates at the opening ceremony of the 55th Annual Meeting in Brasilia, Brazil, with governors from across the Caribbean region in attendance.

Bread and Cereals emerged as the primary driver of food inflation, surging 7.4 percent annually.

Within this category, Rice prices escalated 14.1 percent while Bread costs increased 12.9 percent compared to February 2024 levels.

Protein costs also contributed to inflationary pressures, with the index for Milk, Cheese and Eggs rising to 4.5 percent, “driven primarily by an 18.3 percent increase in the index for Eggs and Egg Based Products,” according to the report.

Meanwhile, Meat and Meat Products rose a more modest 2.1 percent, while the index for fruits increased 1.4 percent over the same period.

On a monthly basis, seven out of nine major supermarket food groups recorded decreases in February.

The decline was primarily driven by Oil and Fats (-7.4 percent), Sugars, Jams Honey, Chocolate and Confectionery (-3.3 percent), Vegetables (-2.7 percent), and Fruits (-1.7 percent).

Meanwhile, the Services sector generated the most substantial inflationary pressures across the economy with miscellaneous goods and services leading all categories with a 15.5 percent annual increase, followed closely by restaurants and hotels at 14.1 percent.

Healthcare services contributed significantly to the overall inflation rate with a 10.5 percent increase, while Alcoholic Beverages, Tobacco and Narcotics rose 10.8 percent over the annual period.

Transport services provided notable consumer relief, declining 12.4 percent month-on-month in February.

The latest data comes amidst evolving global trade dynamics brought on by the US tariff and trade policies that could impact future economic data in Antigua and Barbuda—much of it may not be reflected in the CPI until later this year.

The World Bank released its Global Economic Outlook report on Tuesday indicating that Latin American and Caribbean economies face mounting external pressures from evolving US trade policies.

Regional growth projections for Latin America and the Caribbean remain steady at 2.3 percent for 2025, though rising trade barriers with the United States present significant headwinds for export-dependent economies.

With Caribbean nations, including Antigua and Barbuda, continuing to confront a new 10 percent tariffs on exports to the United States, the World Bank warned that “weaker export demand and private consumption growth are set to act as the main drag on growth in 2025” across the region.

“While Mexico is expected to be the economy most directly affected by the recent rise in trade barriers, the entire region will be indirectly impacted. Mexico, Central America, and the Caribbean are highly integrated into the U.S. economy through trade, investment, remittances, and financial linkages.

“Although domestic demand remains resilient, exports throughout the region are expected to weaken this year amid rising trade protectionism and policy uncertainty,” the report said.

Caribbean government and regional agencies have engaged with the US government in recent months in order to reduce the economic impact of US policy actions.

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