The Barbados economy has grown by 10.5 percent over the first half of the year as the country recorded its fifth consecutive quarter of economic growth between April and June, with the job market recovering and unemployment declining. However, Governor of the Barbados Central Bank Cleviston Haynes, delivering his economic review for the first half of the year warned that the external economic environment remains challenging.
He revised the growth forecast for Barbados in 2022 as slightly downward overall.
He notes that the economic rebound continues to be driven by a tourism recovery.
“The expansion, though vibrant was weaker than in the first quarter but is slightly better than forecast rebound in tourism, propelled the economy by an estimated 10.5% over the first half of 2022. Tourism-related activity has not yet returned to pre-pandemic levels. Long stay arrivals, reaching 55% of 2019 levels during the second quarter.”
Mr. Haynes notes the job rebound was helped by the government’s own creation program. “The unemployment rate fell to 9% for the first quarter of 2022, compared to 17.2%, a year earlier, and 10.9% at the end of 2021. During the 12 months ending June. The National Insurance reported that unemployment claims fell to 1/3 of the preceding 12-month period. The gains in private sector employment were broad-based, led by tourism, wholesale and retail, transport and communications, and general services. In addition, Government’s job creation program in the aftermath of the 2021 climatic events help to hasten the recovery in the job market.”
Mr. Haynes believes rising fuel and food prices overseas could dampen Barbados’ growth prospects even as they trigger an upward spiral in local food and energy prices. He stated that while forward bookings for Barbados this year look good, there are international factors that could dampen travel.
These were among the reasons why he lowered the growth forecast for Barbados for 2022 overall which had been previously projected at 11 percent. “The global price pressures, the impact of monetary policy changes on advanced economies as well as summer travel bottlenecks could dampen travel demand. Changes in relative exchange rates in Barbados’ key support markets also have the potential to divert some travel away from the Caribbean. In the circumstances, with new investment projects coming on stream at a slower pace than anticipated and infrastructure costs raising, the bank has lowered its growth forecast slightly within the range of nine to 10% with the possibility of a stronger outturn if tourism is more favorable than currently forecasts.”
Voice of: Barbados Central Bank Governor, Cleviston Haynes.