Apr 2012 Financial News

Not a disappointing first quarter (Barbados)

Apr 30, 2012

THE performance of the economy during the first quarter of this year is not disappointing.

So said the Governor of the Central Bank of Barbados (CBB), Dr. Delisle Worrell, while reacting to a query about the 1.5 per cent growth rate recorded between January and March this year.

“We would have hoped it would be better, but I wouldn’t say much worse than anticipated,” he told the press at the Central Bank last Friday.

It is normally the belief that the first quarter performance is a period of strong growth and it traditionally sets the stage for what is likely to happen for the rest of the year.

The Governor stated, “Our current forecast is a little growth this year, but we know that things usually turn out differently when forecast, so we keep an eye on our foreign reserves every day and together with the Minister of Finance make any correction to keep us on target,” according to him.

He said that furthermore, the Government has taken a big stride towards reducing the fiscal deficit from 9.1 per cent of GDP to 5.4 per cent of GDP in the fiscal year just ended.

“Our debt to GDP ratio now stands at 74 per cent,” Dr. Worrell declared.

The CBB official stated that Government and the private sector are investing in this country’s future in Tourism, International Business and Finance, Agriculture, Agro-industry and alternative energy.

“These foreign exchange earning sectors will lead the way to sustain the growth in the future,” he told the media.

As far as growth is concerned, he stated, “It is what we expected, we never expected we would have robust growth in the first quarter.”

He also ruled out the Barbados economy heading for another recession.

“We are not going into another recession because this would imply that there is negative growth, but positive growth is encouraging. There is no sign that we are falling back in recession,” he reasoned.

Dr. Worrell suggested, “We continue to lean on the side of caution because the world has become a very uncertain place. When we thought that things were improving in the major markets, we do our business in Tourism and International Business, along came the increase of oil crisis, European crisis, etc. We don’t know what is going to be next, thus we remain cautious.”

The Governor reiterated that the major challenge Barbados has for growth “is the international uncertainty, particularly as it affects the financial markets”.

He added, “We hope the international financial markets begin to settle down so that we can get a better stream of foreign direct investment, people willing to buy villas and so on, as well as investment in the international business and financial centre.”


Source:
By Nadia Brancker
Barbados Advocate
Monday April 30, 2012

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=24397