The Barbados economy grew by 2.8 percent in the first quarter of 2011 according to the Central Bank of Barbados.
The economic recovery was led by a strong tourism market with the main U.K. and U.S. markets showing a significant rebound with a 15 percent and 7 percent increase in arrivals respectively. The U.K. recovery can be credited to a strong marketing campaign in the country. The U.S. increase was due to additional airlift capacity from the south of the country.
The International Business and Financial Services Sector also showed signs of recovery with the number of active companies registered in Barbados increasing by 6 percent compared to a year ago. This increase brings the total number of offshore companies registered on the island to 2,411.
Tourism contributed 60 percent of foreign exchange inflows for the period and the offshore sector brought in an additional 12 percent. Private capital inflows were also significantly higher than a year ago.
The construction industry also appears to be recovering posting a 0.3 percent increase. Figures also show that the level of unemployment has declined to 10.5 percent from 11.2 percent.
Government tax receipts have also increased by 4 percent mostly due to the increases in tax rates, namely V.A.T. which grew by 13 percent and individual taxes were up by 2 percent. However, corporate tax revenues fell by 11 percent showing that the effects of the economic downturn are still being felt on the island by local corporations and by the international companies registered here.
There was a $90 million improvement to the fiscal deficit compared to the previous year. This improved the ratio of the fiscal deficit to GDP by 1.6 percent.
Overall, the economy posted a solid performance in the first quarter and is expected to grow by a little over 2 percent in 2011.