Bright sparks in economy
A marginal increase in visitor arrivals and foreign capital inflows were among the bright sparks in an otherwise dreary third quarter economic report yesterday from Central Bank Governor Dr DeLisle Worrell.
The island’s tourist arrivals increased by three per cent between January and September when compared to the previous year, despite what the governor described as a “tenuous recovery” in the economies of North America.
This increase from Canada and United States compensated for a falloff in arrivals from the island’s most important market – Britain.
Foreign reserves stood at $1.4 billion at the end of September – $42 million short of the level at December 2009, the governor noted.
However, he said this level of reserves was sufficient to cover five months of imports if there were no other foreign exchange coming into to the country.
Private capital inflows between January and August were “up modestly, though well short of pre-crisis levels,” the Governor pointed out.
Real estate inflows totalled $86 million, an improvement on the $53 million in the corresponding period last year.
Important cash injections too included $100 million to finance the construction of the new Banks Breweries factory as well as financing for the soon-to-be-completed Limegrove Lifestyle Centre in St James.
“During the period there was also an inflow of $40 million from the sale of a US dollar series of a Barbados National Oil Company bond issue,” Worrell pointed out.
The economic picture from here on for the nine-month period faded for Barbados as the Governor said foreign earnings from sugar were down by 45 per cent due to a severe drought and a weak tourism outturn was reflected in many related services.
“Performance in the construction sector has been disappointing with output down almost 15 per cent [at] the end of September 2010. Falling demand for cement led the island’s lone cement plant to announce a suspension of cement production for 90 days, resulting in the temporary layoff of around half of its staff,” Worrell added.
Despite the economic difficulties, unemployment numbers rose just marginally to 10.7 per cent. During the second quarter, the number of people finding jobs in construction and the distributive trades declined by approximately 35 per cent.
The Governor reported that inflation moved from 4.7 per cent in June to five per cent over the 12 months period ending in July. (GE)