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Tourism spurs double-digit growth in Barbados economy

Tourism spurs double-digit growth in Barbados economy
Governor of the Central Bank of Barbados Cleviston Haynes. (GP)

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Barbados’ economy has continued its climb out of recession, growing by 11.8 per cent between January and March mainly because of a big rebound in tourism.

Central Bank Governor Cleviston Haynes, who reported this today in his first quarter press conference at the Courtney Blackman Grande Salle, also said economic growth was also expected to be in double digits for all of 2022, even though the International Monetary Fund downgraded its global growth forecast.

Haynes is, however, most concerned about elevated global uncertainty, especially the war in Ukraine, and its potential fallout for tourism, and the conflict’s continued negative influence on food and fuel prices.

“The positive signs of a robust economic recovery as witnessed during the last nine months of 2021 were sustained into the first quarter of the year. A re-emerging tourism sector helped to propel the growth momentum and to stabilise the labour market which registered a low level of jobless claims. However, despite the gains, activity is not yet at pre-COVID levels,” Haynes reported.

“The uncertainty that pervades the world economy, as a result of on-going health-related risks associated with the pandemic, supply chain disruptions, geopolitical events and monetary policy tightening in advanced economies, served as a poignant reminder of the challenges and vulnerability of the domestic economy.”

Haynes also cautioned that “a prolonged war could slow the global economic recovery and affect the revival of the local economy”.

“’Already domestic prices have risen in line with international price movements, prompting Government to introduce measures focused directly on containing some of the price increases,” he said.

With the economy improving, the economist said Government’s revenue has recovered faster than expected, “partly the result of the impact of rising prices”.

With unemployment at 10.9 per cent at the end of last year, Haynes said the labour market “continued to stabilise during the first quarter”.

The Governor also reported that even though the gross international reserves declined by $40 million, they totalled more than $3 billion, equivalent to 36.4 weeks of import cover.

Government’s debt is also trending down because of the increase in economic activity.

“Total public sector debt stood at $13.3 billion or 132 per cent of GDP compared to 142 per cent one year prior, the result of the gradual recovery of economic activity,” he said.

With the bulk of the year still to come, Haynes said the bank still expected to grow by at least ten per cent, “premised on the sustained revival of tourism and the acceleration of activity in the construction sector”.

“However, a poorer than anticipated recovery globally, delays in projected construction or prolonged supply disruptions can slow our recovery,” he added. (SC)