Stephen optimistic about economy
Tue, 07/26/2016 - 12:00am
ECONOMIST Jeremy Stephen said he is very hopeful for the Barbados economy, which has maintained its growth trajectory.
Responding to the recent performance of the economy for the first half of 2016, Stephen, the President of the Barbados Economics Society (BES), said that he is pleased that the unemployment rate in the country has fallen.
However, he believes that the Central Bank of Barbados should have given more information about the reasons why unemployment has fallen by almost two percentage points.
Last week, the Bank said the economy expanded 1.3 per cent between January and June this year with Tourism and Construction contributing to the improved performance.
It said that unemployment had fallen from 12.4 per cent at the end of March 2015 to about 10.7 per cent at the end of March this year. The Ministry of Labour has put the rate at just over nine per cent.
“The performance is in line with the forecast coming out of the fourth quarter of last year.”
Noting that the report stated that construction is behind schedule, the BES President said that there is a lot of anticipation ahead because of the level of imports of construction material.
“One would believe that the GDP as registered is a bit higher than anticipated,” the Economist remarked.
He made the point that at the end of the day, this is what the Central Bank of Barbados would have presented.
According to him, “I am pleased to note that the outlook has been somewhat conservative relative to a couple years ago. It is acknowledged that major investment projects are behind schedule, and Brexit will have a significant impact on the economy of Barbados.”
He maintained the belief is that it will impact on the sale of villas and that depending on the behaviour of the pound sterling, the sale of the villas could stabilise.
Stephen also said it is anticipated that the printing of money by the Central Bank will continue in the medium term. Alluding to the report on the first half performance, Stephen said during the first six months Government relied very heavily on the Central Bank.
He noted that this year net money creation amounted to more than $102 million, half the amount of what happened last year, which for two years straight is a reversal of what took place in 2014/15.
“So what this assumes is that the current pact at which the Central Bank is going, it will print more money this year than it did last year,” he added.