THE UNITED STATES Subprime Mortgage Crisis and Its Implications for the Caribbean

Against the backdrop of world economic growth, the Caribbean as a whole experienced positive growth rates of 3.9 per cent in 2007, down from 5.8 per cent in 2006, driven by commodity price booms in Trinidad and Tobago and tourism-related construction especially in Antigua and Barbuda and Anguilla.4 Given the trade and financial linkages, it is very unlikely that the region will escape the slowdown in the United States economy, let alone a plain recession. Though not measurable at this time, the likely channels of transmission of any impact of a United States recession on Caribbean economic growth are trade, tourism, remittances,finance and Foreign Direct Investment (FDI).