EDITORIAL: More needs to be done
MORE work is required to bring Barbados’ economy to the point it needs to reach.
Over the past years the cry has been that Barbados needs to get growth going in order to have a more robust economy and not be caught in a spin if and when another global recession happens, leaving our only leading sector to face the music, and similar to what took place in post-2008.
Last week the Governor of the Central Bank of Barbados, Cleviston Haynes, presented the Bank’s report on how the local economy did between January and June this year, which allows analysts to assess the results not only for the comparative period in 2018, but to gauge what is likely to achieve in the years ahead.
The Review showed that some progress was made with stabilising the country’s foreign reserves by way of borrowings from the multilateral institutions (IMF, IDB and CDB); achieving a somewhat lower fiscal deficit compared to a year ago when it was three per cent to four per cent of GDP, with this latest figure having been realized through revenue-raising measures and expenditure cuts; and, among other things, debt reduction by domestic debt rescheduling, debt write off and the suspension of loan repayments. This performance will most likely draw positive reactions that Barbados is coming around and out of the hole it was in over the last couple years. It represents a fresh perspective that once these efforts are built upon and other relevant things put in place, Barbados will be on the road towards improvements.
Mr. Haynes told the media that economic adjustments are seldom easy and that efforts are required to safeguard “our standard of living”. He therefore urged us to continue to work together to achieve the mission at hand.
What however remains a challenging goal for our economic managers, is that the economy continues to be in recession having incurred a 0.2 per cent dip in GDP for the period under review. Added to that the country is not seeing the emergence or even the resuscitation of the economic sectors that will give lasting and sustainable growth to the economy. In the meantime the external debt negotiations are still ongoing with an anticipated year end completion, or likely even sooner.
The economic review by the Governor showed us where our economic sectors are currently positioned. Construction fell five per cent, Agriculture was down eight per cent, and with regard to Tourism, visitor arrivals from Canada were down, in addition to the cruise passenger business. Growth will not come overnight because of the high debt, the ongoing fiscal consolidation, and even where business confidence is said to be returning, there is still a degree of uncertainty.
Factor in also the unstable global economic environment dominated by the trade tensions between the United States and China; the United States and Iran; the uncertainty surrounding BREXIT; and rising oil prices, and all of these can have a negative impact on Barbados (and small countries).
The Governor said that the Bank believes the economy is moving in the right direction, but a lot more is required to steer the ship in the choppy economic waters in and around us.