Regional economist Marla Dukharan has given upbeat prospects for Barbados this year as the island continues its Barbados Economic Recovery and Transformation (BERT) programme.
In her Caribbean Economic Outlook 2020, Dukharan said she was optimistic about the positive growth for the region.
On Barbados, Dukharan said the ongoing reforms of state owned enterprises were key to the island achieving its ambitious fiscal target and sustaining it.
Under the belt-tightening BERT programme, which is being backed by the International Monetary Fund (IMF), Government is aiming to achieve a primary fiscal surplus of six per cent of gross domestic product by the end of the current fiscal year, which ends at the end of March.
“Barbados is on target to reach that target,” said Dukharan.
Last week, Central Bank Governor Cleviston Haynes said he was also confident it would be achieved, pointing out that the primary balance was currently 4.8 per cent.
But Dukharan expressed concern about unemployment and low levels of investments in the island.
She said: “Unemployment is rising in Barbados. Construction and investment is still relatively weak, and we need to see further pro-competitiveness, pro-doing business reforms in order to reverse that weak construction and investment that we are seeing.
“The size of the construction sector was about 20 per cent smaller last year than it was on average between 2006 and 2015.
“So the construction sector has some way to go to get back to where it used to be.
“The economy is expected to have contracted last year based on the reforms, especially the fiscal reforms.”
But Dukharan predicted growth this year, at a weak pace not exceeding 1.8 per cent through 2024 as predicted by the IMF.
Following its moderate growth of close to three per cent last year, its fifth consecutive year of growth, Dukharan said she expected the island’s bread and butter tourism industry to increase again this year.
This, she said, would be based partially on the We Gatherin’ initiative, which is designed to encourage the diaspora to return home and share in a number of community-based activities in all the parishes each month until the end of the year.
Dukharan said: ‘So all in all Barbados is meeting its targets under the BERT programme and we are expecting to see the positive results of these reforms bearing fruits this year 2020 and beyond for Barbados.”
She issued a word of caution that Barbados and other countries should continue to pay close attention to both climactic and geopolitical events including happenings in neighbouring Venezuela, the upcoming US election and Middle East tensions.