Business Monday: CBB to release economic review

THE local economy will be under the spotlight this week, when the Central Bank of Barbados issues its release on the performance of the economy for the first quarter of 2016.

Coming against the background of a near one per cent growth in 2015, the review, to be given by the Bank’s Governor, Dr. Delisle Worrell, will indicate whether that expansion has carried through into 2016.

The review will be made known tomorrow.

The economy, which has started to recover with slender growth, is led by Tourism industry, which registered a 15 per cent increase in long stay visitor arrivals, with tourism receipts increasing five per cent. However, the other economic sectors did not make much of a headway.

The tradables – Tourism, International Business, Manufacturing and Agriculture – were 1.6 per cent higher in 2015, and the non tradables – Wholesale and Retail, Construction and Transportation – increased marginally by 0.2 per cent.

For the first quarter to March 2015, the economy grew by 0.6 per cent.

Apart from growth, other major issues for the first quarter of 2016 will be the level of country’s international reserves, the fiscal deficit, and whether the Bank’s original projection for 2016 will remain or will be upgraded in accordance with projections made by the International Monetary Fund.

At the end of December last year, Barbados’ foreign reserves stood at $927.0 million, the equivalent of approximately 14 weeks of imports. However, the amount represents the third consecutive year that the reserves had fallen.

However, according to the Bank’s Governor in January this year, higher debt service, lower long term inflows, when compared to 2014, and Government’s subscription in the Andean Development Bank resulted in net outflows of $126 million last year.

In his review for 2016, Dr. Worrell has projected a growth rate of 1.8 per cent this year, with tourism and construction activity expected to lead the way, as well as an improved revenue performance for fiscal 2016/2017.

The targeted deficit for the period to March 31, 2016, was four per cent of GDP. That was premised on Government being able to divest the Barbados National Terminal Incorporated. That is still to be finalised.

The Governor’s vision, and that of the Minister of Finance and Economic Affairs, Christopher Sinckler, is to ensure that GDP is above the fiscal deficit. What happened in the first quarter will determine if that is likely to be the case in 2016.