Barbados’ economic growth prospects in 2012 for the medium term are encouraging once the international economy settles down. This is the view of the Central Bank of Barbados (CBB) recent report on the economy’s performance for the past year.
The outlook for 2012 according to the review is, “The growth rate in 2012 maybe one per cent or less, unless the international economic and financial climate improves.”
Construction of tourism facilities and Government’s housing initiatives are expected to be the main drivers of that growth. “Therefore, in the medium term, growth rates of two to three per cent are possible, provided the strategies mentioned earlier are successfully implemented,” said the CBB statement.
According to the report, “The economy remains stable and foreign exchange inflows are expected to cover imports and other foreign payments, as in 2011. The foreign reserve cover is expected to remain about 18 weeks of imports. The key to maintaining macroeconomic stability will be strict adherence to the targets of the medium term fiscal strategy.”
Tourism performance has shown that numbers have increased, but length of stay has fallen, leading to an increase in tourism output that was marginal, at 0.3 per cent in 2011. However, the review highlighted, “The economic prospects for tourism remain competitive because the country is known internationally as a high quality destination. In order to maintain a competitive edge in tourism, the industry must attain and maintain international standards at all times.”
New investment in luxury accommodation and amenities such as the Four Seasons, Lime Grove and Port Ferdinand strengthens Barbados’ international competitiveness. Further investment is needed in refurbishment and upgrades of hotels and tourism facilities, including the cultural and historical legacy of the country.
In terms of cruise tourism, following a 4.6 per cent increase in 2010, cruise arrivals declined by approximately one per cent for the year. Based on the estimated reduction in cruise ship calls, this is expected to continue into 2012, according to the CBB.
The report stated there was no significant expansion in the International Business and Financial sectors for the past year but there are expectations of improvements.
“Completing the upgrade of financial regulation and the extension of Barbados’ network of Double Taxation Agreements (DTAs) are key actions being used to spur new growth in international business and financial services,” was stated in the review.
In terms of other sectors, the report added, “The prospects for agriculture and agro-industry depend on the development of an integrated strategy which includes a range of traditional and new products, and focuses on products and linkages, which have high value added in Barbados.
“IDB-financed programmes for alternative energy use are another source of potential growth and foreign exchange savings.”
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