Tuesday 26 May, 2020

CBB Governor: Challenging road ahead

Barbadians are being asked to hold strain for a little longer as government seeks to stabilize the economy and improve growth.  

This from Governor of the Central Bank of Barbados (CBB), Cleviston Haynes as he delivered the first quarter performance review at a press conference this morning.  

The Governor said the road ahead “remains challenging” and the outcome of the measures implemented in the June 2018 and March 2019 Budget would determine if new tax measures are required.   

Haynes told reporters there has been some progress made as government was able to achieve the fiscal target of 3.3 percent of GDP for the 2018/2019 financial year. In addition, targets for the stock of international reserves, a successful debt restructuring program as well as limits on transfers to state-owned enterprises were also achieved.  

He noted the rate of economic recovery hinged on the speed of implementation of new investments including the Kooyman Retail, the Sagicor Retirement Village and other tourism-based construction projects.  

Overall economic growth is now forecasted between the range of zero to 0.25 percent for 2019.  

He said the CBB is “fairly confident” the target of six percent of GDP can be reached by 2020, ensuring that the loan agreement with the International Monetary Fund (IMF) will be upheld. He revealed an IMF team will be on island next week to conduct an assessment of economic performance up to the end of March 2019.  

“Based on the provisional numbers we have looked at so far, we believe the targets will be met and when the review is completed, the Fund will be able to go to the Board and recommend the drawdown of the next tranche which will be approximately $49 million US as we would have drawn originally.” 

Pending a successful review by the IMF, the next tranche should be made available by June 2019. 

He stressed the need for government to exercise fiscal discipline over the next financial year and asked that the Barbadians be patient in the event that government is forced to introduce additional tax measures.  

“It is obviously a very challenging situation but the welfare of Barbados requires us to get out of it and it means we have to take difficult decisions, some of which include increased taxation … it is not something that we can do overnight and so we ask persons to be patient, the progress we have made so far has been promising.” 

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