Amidst the cries of economic hard times and the pain of layoffs, the Central Bank of Barbados is projecting that the economy will grow slightly this year.
Reporting today on the current state of the local economy, Central Bank Governor Dr Delisle Worrell forecast growth of 0.3 per cent.
“We expect the economy to pick up in subsequent years to 1.2 per cent in 2015 and 2.5 per cent growth in 2016,” Dr Worrell added.
He announced that output for the economy as a whole remained flat, despite an improvement in tourism.
“Output in tourism is estimated to have increased marginally for the first half of the year. Arrivals from the UK were up 8.2 per cent, but there was a fall-off from the US, Canada and the Caribbean,” Dr Worrell reported.
He revealed that the average length of stay rose by 1.5 per cent and the average spend per visitor was estimated to have risen by one per cent, making this the third consecutive year that average expenditure had increased. “Average spending has now recovered to the levels of 2008,” he announced.
He also informed the country that preliminary estimates for the first quarter of the fiscal year, show a $5 million decline in government revenue, with VAT receipts down $8 million, corporate tax revenue down $3 million and other indirect taxes recording a cumlutive decrease of $4 million.
The government advisor said, too, that at the end of May, the net indebtedness of the public sector, including state enterprises and the National Insurance Board, was equivalent to 73 per cent of GDP.
“The ratio of external debt service to foreign exchange earnings, remained below seven per cent at the end of the first quarter. The Government’s financing needs for the remaining three quarters of the current fiscal year are projected to be about $300 million.”
This, the Governor noted, is to be financed by commercial banks’ surplus of funding over the credit needs of the private sector, the surplus of the NIS and funds from the non-bank financial institutions.
Dr Worrell also disclosed that the Freundel Stuart administration owes nearly $100 million to a number of state enterprises.
“Government currently holds $97 million in payments outstanding to major state enterprises, including the QEH, UWI, the waste separation plant, the Barbados Agricultural Marketing Corporation and the Barbados National Oil Company, with respect to expenses incurred in fiscal year 2013/14,” he said.
He said specific funding arrangements would be made to eliminate these arrears, in collaboration with the companies and institutions, to which payments are due.
Looking ahead, Dr Worrell sought to assure Barbadians that the tourism product will be enhanced to the tune of $355 million worth of projects recently completed or currenty underway.
These, he pointed out, include the first phase of the Port Ferdinand Marina, the Bushy Park Motor Racing Circuit, the Apes Hill Clubhouse, an upgrade of the Sandals south coast hotel and refurbishment of hotels and tourism amenities.
He said preparatory technical and financial work was ongoing on the major private sector investment projects such as the Four Seasons and Sandals Beaches and the joint venture cruise ship terminal.
“Prospects are for an increase in airlift capacity out of the major markets for Barbados’ tourism for the coming winter season, with increases of 3 per cent, 10 per cent and 20 per cent out of the UK, US and Canada respectively,” projected Dr Worrell.
He said a three-pronged strategy for the international business and financial services sector includes continual upgrades of this country’s regulatory framework; the extension of its double taxation network; and the development of new markets and products.
In the area of green energy, financial and technical work continues in preparation for the construction of a waste-to-energy plant by private enterprise and the adoption of solar generation by businesses and households, continues to accelerate, concluded the bank chief.