Oct 2014 Financial News

2% growth by 2015 (Barbados)

Oct 22, 2014

ALTHOUGH economic output between January and September this year is similar to that of the corresponding period last year, Barbados’ economy is forecast to grow by 2 per cent next year and by 2.3 per cent in 2016.

These forecasts for the economy were revealed yesterday by the Governor of Central Bank of Barbados, Dr. Delisle Worrell.

In the analysis of Barbados current economic performance for the first nine months of this year, the Governor said: “Real output to September is estimated to be about the same level as last year. Unemployment averaged 13.2 per cent in the year ending in June, up from 11 per cent at June last year. On the other hand, the rate of price inflation was only 1.7 per cent in the 12 months ending in July.”

He revealed that the economy is firmly set on the path to sustainable growth, led by the sectors and activities in which we have a demonstrated comparative advantage over the competition, in terms of quality, productivity and the strength of the Barbados brand. Focused efforts are under way, with the assistance of international financial institutions, to raise the level of public sector performance.”

He said that Barbados’ growth strategy is private sector led, focused mainly on the foreign exchange earning sectors, and anchored on the peg to the US dollar.

“It is the strategy which has always worked for us. Furthermore, our growth is premised on increases in productivity, enhancement of the quality and appeal of our country’s products and services, and reforms aimed at improving Government’s facilitation of business,” according to him.

He said, “The value of the Barbados dollar is being protected by measures to contain spending in line with foreign exchange availability. The fiscal measures to date have achieved the most important objective, to reduce the demand for foreign exchange in line with supply. As a result, the normal daily pattern of changes in foreign reserves has now been restored. At the end of September, the stock of foreign reserves was $1 066 million, equivalent to 15 weeks of import cover.

The tourism sector has begun to turn around. Arrivals increased 8 per cent from the UK, the market which has always recorded the highest expenditure per tourist. Airlift from the US and Canada will increase by 9 per cent and 20 per cent respectively, in time for the coming winter season. Tourism value added is estimated to have increased 0.1 per cent so far for the year.

Barbados continues to hold its own in the international business sector, on the basis of its reputation for sound regulation, good infrastructure and compliance with international standards.”

Dr. Worrell stated that Barbados ha become increasingly price competitive in the areas of tourism and international business when compared to its peers in the Caribbean.
This, he noted, is highlighted by a steady decline in the indexes of price competitiveness since the early 2000s.

He added, “Going forward, this trend is expected to continue, in light of the recently announced investments and other tax incentives in the tourism sector and the further development of the already extensive network of bilateral Double Taxation Treaties (DTAs) and Tax Information Exchange Agreements (TIEAs).

Source:
By Nadia Brancker
Barbados Advocate
Wednesday October 22, 2014

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=39515