It was purely coincidental that Barbadians on Wednesday became privy to two important economic reports that gave them an opening into what could portend for them in the coming months.
The International Monetary Fund (IMF) dropped its World Economic Outlook just two hours after Governor of the Central Bank of Barbados, Cleviston Haynes delivered his outlook for 2022 while also reviewing the year past.
We learned Wednesday morning that the folks at the Central Bank paid deference to our Members of Parliament and delayed delivery of the economic report by two hours while our parliamentarians took their oaths of office before President Dame Sandra Mason at State House.
While our Members of Parliament pledged to put Barbados first and uphold the law, we waited patiently for the prognosis from the Governor and his recommended prescription to address our economic maladies.
As expected, 2021 was not a pretty picture for the Barbados economy or the average citizen, even though there is an acceptance that things could have been much worse.
With the pall of the COVID-19 virus still hanging over every aspect of our lives, the fatigue is growing with the disruption this pandemic continues to cause two years after it emerged at our doorsteps.
Bread and butter issues such as the cost of energy, transportation, food, and utilities are foremost on our minds, as we also grapple with trying to get our children back in the classroom, hold on to the jobs that are available, while hoping that business activity returns to some level of normalcy.
It will not be an easy road ahead and citizens know this despite the constrained optimism exhibited by the Central Bank governor.
“The labour market remains soft,” the economist noted. In regular language that translates to “Jobs are hard to get”. He added: “The Barbados Statistical Services estimates that over 13,000 persons gained employment in the twelve-month period ending September.”
We are pleased for those who made it back to the job market, even though we know too many Barbadians who are in jobs for which they are over-qualified and earning incomes that do not meet their basic needs.
It is the prospects for 2022 in which we are most interested. Citizens have been through economic, health, and social shocks, and they simply desire a degree of stability and respite from the uncertainty that has pervaded the last two years.
“The outlook for 2022 will be heavily influenced by its continued vulnerability to external shocks,” Governor Haynes explained. He has, however, expressed some confidence in the resilience of the tourism sector to further recover from the devastation of 2020 and most of 2021.
Given what Barbadians have experienced during the ongoing pandemic, there is good cause to pay greater attention to those who highlight our need to diversify the economy. Our over dependence on tourism has exposed our significant vulnerability if things go south in this sector.
Haynes said the outlook for tourism was “more favourable now than it was a year ago” due to greater availability of vaccines and the reopening of economies to international travel and business activity.
At the same time, he rightly cautions: “There still exist significant downside risks to travel occasioned by the potential for the emergence of newer strains of the virus and the reversion by major source markets to the re-imposition of travel restrictions.”
The IMF, for its part, is also warning those who are relying on the dissipation of COVID-19 and a return to economic boom, that they should restrain such excitement.
In fact, the IMF says the world is entering 2022 in a “weaker position than previously expected”. The multilateral institution warned that as the new Omicron COVID-19 variant spreads, countries are reimposing restrictions on movement. In addition, we were told to expect increasing energy prices and supply disruptions which will translate to greater inflation.
Certainly, the shenanigans and threats by Russia to invade Ukraine, and the possible involvement of the United States and countries in Europe, will only add to the instability that 2022 holds.
Governor Haynes tells us: “Forecasting growth in this environment where there is uncertainty associated with the pace of the recovery in the tourism sector, the availability and cost of international goods, and the inherent uncertainty in the execution of large-scale capital projects remains a fraught exercise.
“The Bank has developed multiple scenarios for growth but is optimistic that, absent the re-imposition of travel restrictions, or the deepening of the supply chain disruption, or significant geopolitical shocks, there is potential for a robust recovery leading to double-digit growth in 2022.”
We have taken note of the Governor’s forecast which is littered with strategic exceptions and conditions. This points to what we know, and that is, there is still so much that we do know about what to expect of 2022.
