EXPECTED RESURGENCE

EXPECTED RESURGENCE IN the construction industry over the next six months should help to ease the local economy out of its current slump.That was the word of hope from Governor of the Central Bank of Barbados, Dr DeLisle Worrell, as he spoke to media representatives yesterday at a Press conference hosted by the Central Bank at its offices, The City. “We would like to see things get moving again, but unfortunately the international situation has become very uncertain and as a result we have to continue to exercise patience . . . We are still hopeful that by the end of the year we will be in positive territory as far as real GDP is concerned.”Before fielding questions from the Press after releasing his review of the island’s economic performance for the first half of 2010 on Tuesday, he said the approximate $75 million in private capital inflows for tourism-related projects in the first half of the year and other projects such as the construction of a Four Seasons hotel here would stimulate economic growth.Worrell provided assurance that the execution of those building programmes would not drain the foreign reserves, which dropped by $68 million in the first six months of 2010, “beyond what we have anticipated”.“I don’t expect that anything will happen with the newer projects like  Pickerings [in St Lucy] during the rest of this fiscal year. Those are some way ahead, but certainly the Four Seasons [and] Beachlands. And some projects are already underway, like the new marina next to Port St Charles.“We expect that there will be a turnaround in the construction sector in the second half [of the year] and we factored that into our projections. So our projection of reserves towards the end of the year takes account of the imports that would be required for the expected level of construction,” the economist said.He maintained that the economy remained stable, foreign exchange reserves of 19.3 weeks of cover surpassed sufficiency, and the peg of the Barbados dollar to the US dollar was secure.“However, it is imperative that we continue the programme of fiscal consolidation so that we achieve the targets of the medium term fiscal strategy . . . We cannot eliminate or reduce the fiscal deficit sufficiently in a single bound. But we have a strategy, which year by year, step by step we will bring that deficit down to something which is sustainable in the medium term,” Central Bank Governor said.
(Stacey Russell)