Economic outlook bleak for Barbados
The economic review released by the Central Bank of Barbados (CBB) earlier today, confirmed what most Barbadians were already aware of - the country's economy is in the dumps.
CBB Governor, Cleviston Haynes said the economy is estimated to have contracted by 0.7 percent in the first three months of this year.
The economic decline was due mostly to a fall-off in real output from the tourism sector, slowing of activity in the construction sector, the late start to sugar harvest as well as a slowdown in domestic demand.
On a positive note, there was a slight increase in the position of the international reserves, up $14 million in the first quarter. This brings the total to $423 million, equivalent to 6.9 weeks of import cover at the end of March. But this is still well below the standard 12 weeks of import cover.
Receipts from tourism earnings accounted for a portion of the increase in foreign exchange, however due to major foreign debt payments to the tune of $90 million, the gains were not substantial.
The fiscal deficit fell by 1.5 per cent to 4.2 per cent in the fiscal year. But this was still significantly above the small surplus targeted by government in the May 2017 Budget.
During the interactive session with the media, Haynes told reporters that government has not made the progress needed for the economy to experience growth. He said the situation will worsen before it improves, as government needs to implement medium to long term measures to achieve the objectives of containing the fiscal deficit.
He suggested government revise its domestic policy on spending to "get breathing room", adding government was no longer in a position to finance the deficit.
The current growth forecast for 2018 has been revised downward to –0.25 per cent to 0.25 per cent, below the last quarter projected growth forecast of 0.5 per cent to one per cent.