Monday 30 November, 2020

CBB: Economic activity ‘sluggish’

Despite the improvements in some areas of economic performance for the first half of 2019, the Central Bank of Barbados (CBB) has noted economic activity has been “sluggish” and growth is forecasted to be in the range of zero percent to 0.25 percent for the rest of the year. 

CBB Governor, Cleviston Haynes provided an update during a press conference today where he noted the economy registered steady progress from January to June as government continues to implement the Barbados Economic Recovery and Transformation (BERT) programme. The programme, along with the budgetary measures introduced in 2018, have resulted in an improvement in public finances, increase in the level of international reserves and an ease in the high level of government debt.

“We always anticipated that there would not be any significant improvement in economic activity during 2019 because .. we are going through a process of adjustment.”

“The adjustment that we are undertaking is a significant adjustment and we are committed ourselves to generating a primary balance of six percent of GDP which is quite a significant improvement over what we were doing in recent years."

Governor Haynes said fiscal discipline is critical to achieving this target as government must work to contain expenditure and collect revenue from taxes implemented.

“Once we are able to continue to manage our expenditure as well as to improve our administration of taxes then I see that we are out of the worst as it relates to fiscal.”

The Governor also said economic recovery depends heavily on how soon stalled construction projects can get off the ground. For the first half of the year, the sector saw an estimated decline in activity of five percent. This was due to a slow pick-up in projects as well as low levels of investment.

In the tourism sector, cruise arrivals declined by 1.9 percent while overall agricultural output declined by eight percent.

The current economic forecast for 2020 is in the range of of 0.75 percent and 1.25 percent, providing that performance in the tourism sector improves and construction projects get underway. 

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