Serious challenges linger for the Barbados economy, Acting Central Bank Governor Cleviston Haynes disclosed today.
In his report on the island’s economic performance for the first nine months of the year, Haynes outlined a worrying slide in already low international reserves.
At the end of the third quarter, reserves had reached 8.6 weeks of import cover, which is below the international benchmark of 12 weeks.
Overall, the economy grew by an estimated 1.4 per cent for the period under review, largely fueled by the performance of the tourism sector which expanded by 4.1 per cent compared to 2.8 per cent growth of the corresponding period in 2016.
The Government, however, made some headway in reducing the island’s high fiscal deficit.
“The fiscal deficit was estimated to be $279 million for the first six months of the fiscal year, a $115 million improvement over the same period in 2016,” the Central Bank report said.
Governor Haynes said despite the moderate growth and some improvement in the fiscal imbalance, the Government must take urgent action to halt the slide in international reserves to protect the country’s exchange rate.
He underscored that Government must maintain a tight hold on its expenditure to allow recently introduced tax revenue measures to reduce the debt overhang and place the economy on sustainable footing.