The Governor of the Central Bank of Barbados, Dr. DeLisle Worrell, has said that the country is doing better than most given the challenging economic climate.
In a recent press conference, he described the economic impact of the global downturn as “the most difficult economic environment we have faced.” He said that the challenges were more difficult than those seen in 1991 – 1992 and that the country has handled the situation very well. He highlighted “the extent to which we have been able to keep our external payments stable and stabilize our finances” as a key metric in measuring how well the Government of Barbados has been able to weather the economic storm. In context, this performance is truly remarkable for a small island state faced with the current challenges that have wrecked havoc on other economies worldwide.
Dr. Worrell was in agreement with former Governor of the Central Bank, Sir Courtney Blackman that the impact of the downturn on major Western economies would most likely result in prolonged weakness in the economy.
There were some bright spots in the report with the Bank reporting that there would be “modest growth” at a rate of 2% in 2011. In addition, the job market is beginning to turn around with unemployment down to 10% from 10.5% in December 2010.
Tourism, a key part of the economy, showed a rebound with an increase in visitor arrivals after two years of declining performance. Great Britain, the island’s major tourism market, led the recovery posting a large 14% increase in arrivals over the previous year
The construction sector also showed improvement and is expected to continue to expand, which will help to lower the unemployment rate further.
The Central Bank also encouraged the Government of Barbados to reduce costs “in order to dampen total spending in the country, and hence imports, in order to maintain foreign exchange reserves near the levels at the beginning of the year.” This reduction in Government spending would also assist in keeping the fiscal deficit under control.
Overall, although the financial situation is not an easy one, the Barbados economy is managing the challenging circumstances very well.