The grim first quarter economic review by the Central Bank of Barbados (CBB) is further proof that the “policy prescriptions” of the Freundel Stuart-led Democratic Labour Party (DLP) have failed, the Barbados Labour Party (BLP) claims.
Speaking at a press briefing this morning at the BLP’s Roebuck Street, The City headquarters to unveil plans for the official launch of its election campaign, General Secretary Dr Jerome Walcott said the report, which raised serious concerns about the country’s foreign reserves, was the latest sign that Barbados was “being plunged deeper into the abyss of gloom and despair”.
“We heard from the Central Bank Governor [Cleviston Haynes] yesterday of a major setback for the economy. It has re-entered the realm of decline. Our economy has contracted by almost one per cent in the first quarter, historically Government’s highest revenue earning period,” Dr Walcott said.
In his economic review yesterday, Haynes revealed that high public sector debt service obligations had restricted the growth of international reserves at the Central Bank to $14 million for the January to March period, with the reserves standing at 6.9 weeks of import cover, a 0.3 per cent rise since December, but still a long way below the recommended 12-week minimum.
With the economy also contracting by 0.7 per cent, Haynes revealed that the bank was considering turning to the private sector for a bailout of between $60 million and $70 million, although he admitted even this would not be enough to prop the reserves.
This morning, Minister of Finance Chris Sinckler blamed the setback on delays in the sale of some state assets, including the Barbados Hilton Resort and the Barbados National Terminal Company Limited, which were expected to bring in a combined US$200 million.
He also said Brexit and the fall in the value of the sterling had impacted on the foreign exchange earnings, while the late start to the sugar crop had aided in the contraction of the economy.
However, Dr Walcott said the blame rested squarely at the feet of the Democratic Labour Party, arguing that its economic policies, including the National Social Responsibility Levy (NSRL), had set the country back.
“Prices have soared because of the ill-advised NSRL. The foreign reserve situation remains grim. So much so that the DLP is now asking the private sector, whose advice they largely ignored, to come to the rescue by supplying foreign exchange,” Walcott said.
BLP leader Mia Mottley also weighed in on the Governor’s report, pointing out that Government had not met any of the intended targets of the NSRL, nor had it been able to stabilize the foreign reserves.
“Yesterday was a sober reminder for us that there are some very difficult times ahead of us, but we [BLP] shall remain focused in this endeavour,” Mottley stressed after she and the 29 other BLP candidates had paid their $250 deposits into the Treasury.