Barbados’ economy expected to grow this year
Thu, 12/29/2016 - 12:00am
THERE is broad consensus that economic growth in Barbados will pick up this year and continue into next year.
This has been pointed out in the Caribbean Regional Quarterly Bulletin published this month by the Washington, DC-based Inter-American Development Bank (IDB).
In their survey on Barbados, a team of IDB officials said that the Central Bank of Barbados (CBB) projects growth of 1.4 per cent for 2016. However, they said that the International Monetary Fund (IMF) is suggesting a growth rate of 2.1 per cent this year and 2.3 per cent for 2017.
Over the medium term, the IDB forecasts suggest output will grow by an average of 1.8 per cent.
In a separate projection, which is not part of the IDB report, the Caribbean Centre for Money and Finance (CCMF) believes the economy can grow by at least 1.7 per cent this year.
The authors of the IDB report said that a favourable external environment in 2017 would continue to support recovery. According to the IDB report, “international oil prices would remain low at around US$55 a barrel, which is beneficial for a net importer like Barbados”.
The Bank further noted that the tourism sector would be dynamic, acknowledging “that an estimated 11 per cent increase in airlift capacity from the main tourism markets is expected over the current winter (tourism) season”.
It was also revealed that once projects like the proposed Sandals Hotel and the rehabilitation of Sam Lord’s Castle continue on schedule, private investments would contribute to the dynamism in construction and other non-tradable sectors.
Those two initiatives, the report noted, would lead to an improvement in the current account balance.
The last CBB report indicated that tourism, construction and business services, fuelled the 1.3 per cent economic expansion in Barbados between January and September this year.
However, all may not be rosy for Barbados as a result of what is likely to take place globally.
The report notes a downside risk for the economy, pointing to the adverse impact on UK tourist arrivals and foreign direct investment as a result of the depreciation of the pound sterling and Brexit.