Int’l business, financial services sector facing challenges

As Barbados remains on course for a 1.4 per cent economic growth rate this year, the country is facing challenges with its International Business and Financial Services sector.

 

Governor of the Central Bank of Barbados, Dr. Delisle Worrell said on Tuesday that there has been a 16 per cent decline in the assets of international business companies. 

 

However, while expressing confidence of the prospects in the sector, the Governor said that Government and Bank officials “are actively engaged with international institutions and companies to find ways of resolving the current challenges”.

 

Dr. Worrell made the comments while giving his assessment of the local economy for the period January to September this year, and making projections for the remainder of the year.

 

He stated that although remaining strong, this country’s International Business and Financial Services sector faces a challenge because of the sentiment against globalisation in the advanced economies.

 

The Governor pointed out that data up to July indicated a 7.5 per cent drop in the number of licences granted to international business companies. 

 

“In addition, a total of $67 billion in assets were held by international banks in June 2016, representing a 16 per cent decrease over a 12-month period,” the Governor reported.

 

According to the Governor, the Bank is forecasting growth of 1.4 per cent this year and in the region of two per cent over the next five years. That growth is expected to be “driven by our competitive, diversified and highly regarded tourism sector”.

 

He added that an 11 per cent increase in airline capacity is expected from the USA and Canada for the coming (Winter) tourist season. A pick up in construction activity is also 

anticipated, much of it tourism related.

 

“The combined effect of the August fiscal measures and revenues from the sale of the Barbados National Terminal Limited is expected to reduce the Government’s deficit to the end of the fiscal year slightly above four per cent of GDP,” the Governor stated.

 

He also indicated that a continuation of the process of fiscal consolidation should reduce the deficit below the rate of GDP growth in 2017. Furthermore, it is projected that in subsequent years, the ratio should decline as Government updates the medium term fiscal adjustment strategy.