Standard & Poor’s (S&P) has given a positive review of Barbados’ economic performance as it continues to recover from the global recession.
The credit rating agency maintained the island’s BBB- investment grade rating in its latest report. S&P said that they felt the economy was recovering after remaining stable through 2010 and posting slight growth at 0.3 per cent of GDP. The agency expects growth to accelerate in 2011 and 2012.
The agency said: “Real GDP increased by 2.8 per cent in the first three months of 2011. A pickup in tourism (arrivals and spending each grew by 7 per cent in the first quarter of 2011) as well as a gradual rebound in other private-sector activity should support the forecasted real GDP growth of 2 per cent this year and 3 per cent in 2012–2013.”
S&P praised the government’s actions to raise revenues and control expenditures in an effort to narrow the fiscal deficit. The measures taken have started to yield positive results with the deficit “estimated to have declined to 5.6 per cent of GDP in 2010 from 7 per cent in 2009, and the forecast is for it to narrow further, to 4.6 per cent of GDP, in 2011.”
Furthermore, S&P remained positive about the prospect of upgrading Barbados’ rating “if the country’s economic prospects strengthen in a sustainable manner or if fiscal accounts show structural improvement.”
Overall, this is very good news for the island as it continues to emerge from the global recession. Despite its small size, the country has navigated the recession well. The government has a history of taking action to deal with any economic problems faced and has received national support for its current adjustment measures.