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Central Bank reports 1.6 per cent growth in 2016

NATASHA BECKLES, [email protected]

Central Bank reports 1.6 per cent growth in 2016

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THE CENTRAL BANK of Barbados says the economy grew by 1.6 per cent in 2016 and expansion of two per cent is expected for the next five years.

In its review of the economy which was released today, the bank attributed the growth to “investments made to reinforce Barbados’ competitive tourism sector in recent years”.

“The diversity of countries from which we attract visitors has been central to the success of our tourism industry. During 2016, long-stay arrivals increased by six per cent, with arrivals from the US up by 14 per cent and Caribbean arrivals 13 per cent higher,” the release stated.

The bank added that there was an associated decline in unemployment to ten per cent for the four quarters ending in September.

The report said receipts from services other than tourism  held their own, averaging about $1.1 billion since 2013. However, the assets of international banks offering global services declined by nine per cent to $69 billion. The number of international business companies declined by five per cent, as at October 2016.

The Central Bank’s stock of international reserves at the end of December stood at $681 million, equivalent to 10.3 weeks of imports. In addition, inflows of over $250 million were pending on December 31.

Despite the positive economic outlook, the bank called for an urgent increase in productivity in the delivery of public services.

“Such an increase could accelerate the forecast rate of growth by at least one per cent, by improving business facilitation, bringing forward the implementation of investments, and improving the attractiveness of doing business in Barbados.

“In addition, the productivity gain would permit a reduction in the wages bill and transfers to public entities, without any reduction of the level and quantity of services offered. This reduction in wages and transfers would assist in eliminating the Government’s deficit on its current account. The fact that Government spends more on the current account than it receives in taxes and other current receipts is the reason for the increase in Central Bank lending to Government,” the release said.

The bank said there was general agreement that any additional financing by Central Bank should be avoided.

It noted that the sale of assets owned by the public sector would also assist in eliminating the deficit. (NB)