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Economic recovery slowed by COVID

Shawn Cumberbatch

Economic recovery slowed by COVID
Central Bank Governor Cleviston Haynes (FILE)

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The Central Bank is looking back on 2020 as “an especially difficult year” for Barbados’ economy, and says previous hope of a “strong partial recovery” this year have been dashed by the COVID-19 pandemic’s global resurgence.

Governor Clevision Haynes, in his annual economic review today, said the economy contracted by about 18 per cent over the past months, largely because of a 71 per cent decline in long-stay arrivals for the year.

“The spill-over effects of the downturn in tourism was especially felt in the wholesale and retail and business service sectors, including real estate, car rentals and the ancillary services provided to the tourist industry. Reduced activity during the lockdown period and lower demand arising from the fall in incomes were largely responsible for the sharp decline,” he reported.

The economist told the media and an online audience that the economic forecast for 2021 was less than five per cent growth. He urged the country to “use this period to ramp us our focus, not only to help us navigate this period, but also to prepare us to be more competitive in the new environment”.

On the plus side, Haynes said “the progress made since the start of the four year economic adjustment programme with the International Monetary Fund enabled us to adapt economic policy, quickly mobilise external funding, building unprecedented reserve buffers and close the financing gap that might otherwise derail our recovery efforts”.

Agriculture was the lone sector to improve its performance last year. Its output was 1.9 per cent higher than in 2020.

Higher food crop production, was the main reason for agriculture’s improvement, he explained.

With Barbados ending the year with $2.6 billion in foreign reserves in hand, the Government said this would “allow Barbados to continue to meet its external obligations on time. (SC)