The recession in the Barbados economy has slowed and it is projected that growth of about two per cent should be achieved during 2011, as tourism continues to improve and other key sectors rebound.
According to the Central Bank of Barbados’ review of the country’s economic performance for 2010, beyond this year the economy is expected to achieve a three per cent rate of growth, as the effects of the global crisis abate.
Preliminary estimates suggest that the economy contracted by 0.4 per cent, compared to a decline of 4.7 per cent in 2009.
The Central Bank said yesterday in a release that the economy had levelled out and a balance of external payments and receipts was achieved, with the benefit of some market borrowing and official inflows.
“However, the anaemic performance of North Atlantic economies meant that tourism and international business and financial services did not live up to expectations, and the knock-on effects depressed cash flows throughout the economy.
“As a result, unemployment increased somewhat,” it stated.
It was noted that two years of economic contraction had made it difficult for private firms to avoid layoffs in spite of Government’s incentives designed to alleviate the pressure of employees’ benefits on companies’ cash flow.
Therefore, the bank said the unemployment rate stood at 11.2 per cent in the third quarter of 2010, some 0.7 percentage points higher than a year earlier.
Furthermore, the current account deficit widened to 7.4 per cent of GDP in 2010, from 6.6 per cent in 2009 while the 12-month moving average inflation rate was estimated at 5.4 per cent at the end of October, compared with 4.4 per cent a year earlier.
The bank said tourism began to recover in 2010 with value added in the sector estimated to have risen by three per cent up to November.
Arrivals from Canada and the United States were up by 17 per cent and 13 per cent, respectively while airline seating capacity increased by 22 per cent and 11.5 per cent, respectively.
However, British arrivals to November were down six per cent, compared with a 14 per cent fall in 2009.
Arrivals from Caribbean countries fell by three per cent, despite an increase in visitors from Trinidad and Tobago.
Meanwhile, the international business and financial services sector contracted for a second year, but by less than in 2009.
“For the first nine months of 2010, the number of new licences issued to companies operating in the sector was eight per cent below the number issued in the period for 2009.
“The number of registered offshore banks declined by six per cent during the year and total assets fell 12 per cent,” the Bank noted.
The Central Bank also revealed that foreign exchange reserves at the end of 2010 stood at $1 451 million, the equivalent to imports of goods and services for about 21 weeks, and almost on par with end-2009 levels.
