RESEARCH ANALYST with Caribbean Money Market Brokers (CMMB), Vangie Bhagoo believes the Barbados economy would sustain positive growth trends over this year.

She assessed the future of global and regional economies recently, saying that inflationary pressures easing to 5.2 per cent at the end of July 2007 showed that Barbados' economy recovered since the start of 2007 and reduced the island's vulnerability to external shocks.

"It also bodes well for the country's ability to manage its peg against the United States dollar," she added.

Speaking at the CFA lecture series in the Grande Salle of the Tom Adams Financial Centre, Bhagoo said that tourism supported the economy's 4.4 per cent growth for the first nine months last year, but financial services should be used to strengthen the country's economy.

"Economic growth is expected to continue along its current path, with tourism and the financial sector playing a vital role in the growth process," she said, stressing that "financial services are becoming very important and this should continue as the Government gradually relaxes capital restrictions."

The CMMB analyst mirrored Central Bank of Barbados governor Dr Marion Williams' position on Barbados' capacity to confront global economic pressures.

"Given the slowdown in the US and the easing cycle, we should also see rates coming down in Barbados. Economic conditions also allow for it. Growth is steady; the external accounts are slowly improving, with net international reserves rising.

"The fiscal accounts are also starting to improve as expenditure on projects associated with cricket is now finished," Bhagoo surmised. (SR)