Wednesday 5 August, 2020

CBB, IMF differ on economic growth forecast for Barbados

The Central Bank of Barbados (CBB) has predicted economic growth will be between 1.25 percent and 1.75 percent for 2020.

Word of this came from CBB Governor, Cleviston Haynes during the Bank’s review of the economic performance for 2019.

The Governor noted there was modest economic recovery during the second half of 2019. While improved performance was recorded in the tourism sector, real economic activity declined by 0.1 percent for 2019.

The International Monetary Fund (IMF) differs in the growth forecast for this year, putting their predictions at 0.6 percent. However, Haynes told members of the media he believes the 1.75 percent prediction for Barbados is achievable.

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He said achieving the forecasted growth depended heavily on getting the planned construction projects off the ground as soon as possible.

“The fundamental issue comes back to the investment. I am optimistic that we will get these investments started. As economist we tend to be conservative, we don’t want to go too far out on the limb but if we can get these projects started and the sooner we can get them started… if I could say to you that a number of projects were going to start tomorrow for example, I might be willing to raise my forecast above what we already have.”

Growth in the construction sector during 2019 declined by 4.7 per cent and Governor Haynes said there needs to be improvements to the regulatory framework if these planned investments are to come into being and result in improved economic performance.

In a recent statement, while the IMF commended Barbados on the implementation of its “homegrown economic reform program”, they encouraged authorities to “continue ongoing efforts to improve the business environment by streamlining regulations and addressing key obstacles to growth”.

“Timing is going to be very critical in our ability to generate growth. But it means there are things that we have to do including making sure all the regulatory approvals are in place…  the sooner that happens, the faster the growth rate will be,” Haynes said at the press briefing.  

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