Jul 2013 Financial News

Barbadian economy slips after first half of 2013

Jul 10, 2013

THERE has been a further decline in the Barbados economy. Yesterday the Central Bank of Barbados reported that output slipped to 0.6 per cent during the first half of this year as a result of the continuing contraction in all the economic sectors and especially tourism.

Apart from the falling output, the net international reserves fell $229 million, Government’s fiscal position has widened to 9.2 per cent of GDP, and the external current account fiscal deficit has also deteriorated.
However, inflation was estimated at 2.7 per cent and unemployment 11.5 per cent.

In the review for the period January to June this year, Governor of the Central Bank of Barbados, Dr. Delisle Worrell said “the first half of the year witnessed a contraction in the main foreign exchange sectors – tourism and international business and financial services. At the same time, private foreign capital inflows were less than a quarter of the figure recorded in the same period last year. “

He said that while foreign exchange levels were relatively unchanged for most of the first three months, they weakened considerably during the second quarter.

“As a result, the foreign reserve cover fell from 19 weeks of imports as at March to 16 weeks at the end of June,” he said. Noting the $229 million fall in reserves, Dr. Worrell stated that “an import reserve cover of 16.4 weeks, recorded at the end of June, indicates that the stock of reserves remains at acceptable level.”
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Long-stay visitor arrivals decreased by seven percent and earnings fell three percent. Declines in arrivals were recorded from all major markets – the UK, USA, Canada and the Caribbean. The average length-of-stay was higher by about 4 percent, but airline seating capacity and hotel room occupancy rates were below last year’s levels.

While the number of new licenses issued to international business and financial services (IBFS) entities increased by eight percent up to May, renewals fell by 14 percent, Dr. Worrell reported.

Measures to stimulate this sector included amendments to the tax structure and intensified marketing in Canada and Latin America. While reporting that manufacturing output was flat, he stated that the agricultural sector remained depressed, activity in construction declined nine per cent and that the distribution sector remained subdued.

Exports of rum fell by 37 percent and exports of sugar were down significantly in the first four months. Similar declines were recorded for exports of chemicals and other beverages. Activity in the construction sector declined by an estimated 9 percent.

The external current account deficit worsened to 6.3 percent of GDP.


Source:
Barbados Advocate
Wednesday July 10, 2013

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=31465