Oct 2009 Financial News

Barbados economic review to be revealed

Oct 26, 2009

SO far in 2009 consumer prices have retreated from their 2008 levels, while in terms of gross domestic product, agriculture remained quite remarkably, one of the few bright spots for 2009.

How these and other economic fundamentals did between January and September 2009, will be revealed on Wednesday when Dr Marion Williams, the outgoing Governor of the Central Bank of Barbados presents her review for that period, and also projections for the economy for the rest of this year.

In the face of a global economic environment which is having its toll on Barbados, consumer prices were at the end of the nine-month period in 2008, some 7.1 percent, compared to 4.4 percent at September 2007. The Bank said back then that the sharpest increases were observed in the prices of alcoholic beverages (30.3 percent) food (17.1 percent), transportation (12.0 percent) and fuel and light (11.7 percent).

Those price increases, according to the CBB, were driven in turn by soaring international food and fuel prices and the reduction in government subsidies for gas and diesel in April.

So far this year there has been an abatement in prices with the overall increases being between four percent and five percent up to the end of June.

Wednesday’s review will indicate the extent to which these prices have either stabilised or increased on account of the factors responsible for their adjustments.

The outlook for 2009 is an overall price level of below the eight percent for the entire 2008. This figure is “expected to moderate, since the anticipated fall-off in world aggregate demand should place downward pressure on the international commodity prices”, the Bank said.

Apart from prices, interest will also focus in the review on the level of growth/economic decline during the nine months to September. One year ago the economy expanded by under one percent, well below the five-year average of 3.4 percent. On that occasion tourism was down 0.1 percent, manufacturing output dropped 5.8 percent, and construction and other non-trade activities declined. Non-sugar agriculture showed strong growth of 3.2 percent, up from 1.5 percent the same period in 2007.

While other sectors remained depressed in 2009, agriculture continued the momentum of growth during the first half of this year. Dr Williams said in July that the economy fell 2.8 percent for the first months of this year.

Agricultural officials are upbeat that such expansion will continue. There have been good fish catches, some have suggested an increase in the production of some food crops although shortages were reported for others due at times to heavy rainfall.

Both long stay and cruise ship arrivals over the nine months will be followed with great interest.

Government’s fiscal position, commercial bank credit, employment, the capital and current account positions, and the state of the net international reserves and debt service will also be dealt with during the review.


Source:
Jewel Brathwaite
Barbados Advocate
Monday October 26, 2009

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