THE GLOBAL ECONOMIC climate is unstable but Barbados' position is strong enough to rally possible economic turbulence.

That is the view of Governor of the Central Bank of Barbados, Dr Marion Williams, who spoke on The Global Economic Outlook And The Implications For Barbados at the monthly meeting of the Barbados Chamber of Commerce and Industry at Hilton Barbados yesterday.

"It is my belief that Barbados is in good shape as we move forward and that we can meet the challenges and this view is corroborated by the international financial institutions and the credit rating agencies who have faith in the strength of our economy and financial stability of our institutions.

"Even if our predictions are more positive than the outturn will suggest, I think Barbados is still fairly well positioned to do well in 2008," Williams declared.

But, the governor indicated, the island must be mindful of stormy industrial relations.

"We have to ensure, however, that our industrial climate also remains calm or our projections would have to be adjusted," she said.

Williams said likely economic outcomes included slowdown in world economic growth, recession in the United States economy and reduction in local foreign exchange earnings.

The link of the Barbados dollar to the continuing weakening United States dollar would present Barbados' greatest challenge, the governor said.

She pointed out that a weak currency would raise the prices of imports from non-dollar sources while lowering the prices of exports. It would also attract a larger number of visitors from non-dollar sources but push down United States visitor arrivals.

Nevertheless, the dominance of the British market in Barbados' tourism-driven economy is likely to keep the market up to a good level.

Essentially, Williams noted, "counties with sound external positions and prudent fiscal management should outperform those with weaker balances and fundamentals", to survive global economic uncertainty. (SR)