EDITORIAL: Under pressure
REPORTS that Barbadians will be in for a round of price increases very soon did not come as a surprise, given all the signs that were there.
The indicators were coming from those who follow such trends and who relate them to the public, so as to put consumers on guard.
For instance, the Central Bank of Barbados had warned about this quite recently, the public was seeing for themselves and complaining, and news reports were highlighting the behaviour of oil prices which, once they have increased, tend to have a negative impact on consumer prices in Barbados.
When he met with the media recently to review the economy for the first quarter of 2021, Bank Governor Cleviston Haynes indicated that prices for food and non-alcoholic beverages, which account for 30 per cent of the basket that measures domestic inflation, were up 7.7 per cent.
With international oil prices having started to recover from the fall last year, the Governor said there was the likelihood for upward price adjustments in terms of consumer prices.
He told the media that the average price for the first quarter of 2021 soared by 39 per cent over the 12-month average of 2020. This reflects an increase in global demand combined with a reduction in oil supplies from OPEC – the Organization of the Petroleum Exporting Countries.
Similarly, international food prices have trended upwards significantly, a direct result of strong gains in vegetable, oil and meat prices, resulting from weaker than expected harvests in the US, South America and Europe coupled with strong demand in China. International food prices are at their highest since June 2014.
Barbadians are currently under pressure as the country continues to work its way out of the blows brought on by COVID-19. People are taxed to the limit with former Central Bank of Barbados Governor, Dr. Delisle Worrell, stating that the tax burden is up by 1.5 points.
Unemployment in the country is still high and any increase in prices will put more pressure on those out of work, not forgetting those in employment who will still feel the negative effects since higher prices can erode their income.
It was thought a long time ago that increasing domestic agricultural output and getting the sector going again should be able to lessen the price impact of some imported items.
It is agreed that increased agricultural output in Barbados will cause magic by making certain foodstuffs in Barbados cheaper.
It was thought that in relation to this, Barbados had turned the corner last year when Non-sugar output increased two per cent at a time when other areas in the economy reported declines.
Unfortunately, Non-sugar did not maintain that growth in the first quarter of 2021, declining in the process.
With St. Vincent and the Grenadines, which exports quantities of food crops to Barbados annually, being knocked over by the volcano, caused another setback.
What seems interesting at this time is whether the agencies which are responsible for watching price movements in Barbados and which can intervene, will have anything to say about this. We refer here to the Social Partnership, which is made up of Government, Trade Unions and the Private Sector, the Ministry of Consumer Affairs and the Fair Trading Commission.
There has to be an intervention.