Declaring that he is not surprised by the sobering Central Bank report card on economic decline so far this year, Chairman of the Barbados Private Sector Association Edward Clarke said Friday he is worried about the outlook.
The key highlights of the first-quarter review included a near 20 per cent shrinking of the economy, projected growth of about three per cent for the rest of this year, $2.6 billion in international reserves – the equivalent of 43.1 weeks of imports – and a decline of $86 million, unemployment of 13.6 per cent at the end of December 2020 and price increases of an average two per cent during the 12 months ending March 31.
The Central Bank Governor also reported that with uncertainty continuing to cloud the outlook for 2021 whatever gains are projected would substantially hinge on the timing and pace at which tourism bounces back along with the Government’s ability to contain the spread of the COVID-19 disease.
He said Government also recorded a debt-to-Gross Domestic Product (GDP) ratio of 152.5 per cent at the end of March 2021, compared to 117 per cent for the corresponding fiscal year.
Clarke told Barbados TODAY: “I don’t think there are any surprises. I think we all expected a very poor first-quarter performance of 2021 based on the lack of tourism and other economic activity, the shutdowns and then the additional stuff that’s happening with COVID…lack of business activity.
“The outlook is what is of concern obviously. We all agree that the outlook is all dependent on what happens in the tourism sector which we have little control of given the global market space at this time. But a lot depends on how we manage our own situation here…how we control our own COVID management and the protocols and so on that are in place.
“We have to ensure we do what we need to do… follow the protocols and get as many people vaccinated as possible.”
He contended that everything must be done to avoid any widespread cases of the virus because the country “simply cannot afford another shutdown”.
The BPSA chairman said: “As you can see, businesses are struggling, unemployment is struggling, people need jobs… there is not enough economic activity to drive employment at this time. We need to get tourism back on the engine room working. Hopefully, we can see some of the capital projects Government has promised to take place in the next fiscal year which is ‘21/’22 starting from April.”
He identified the intrusion of the ash from St Vincent’s La Soufriere Volcano at the start of the new fiscal year in April and a number of bank holidays leading into May Day as other impediments to business activity.
“So these things don’t do anything to stimulate economic activity at this time with COVID in place. So we have to bide our time and try and make sure we are prepared for when tourism comes back…but we need to find ways to stimulate the economy otherwise and to try and get other economic activity in the capital works programme both on the public and private sector side moving,” the spokesman for the business community told Barbados TODAY.
Clarke also warned that the private sector cannot take any more pressure than it is presently experiencing as businesses struggle to keep Barbadians employed.
It is at this point that he reiterated the need for “us as a people” to do the utmost to ensure there are no lapses in containing the virus and to protect “our families to the best of our abilities”.
(emmanueljoseph@barbadostoday.bb)
