There is an undeniable feeling of growing confidence among Barbadians that life is returning to “normal” and the pall of uncertainty that encircled us over the past two to three years is beginning to ease.
The associated merriment of the Christmas holiday season is certainly playing a role in how Barbadians are feeling, but there is also empirical evidence that citizens believe we are turning the corner on one of the most traumatic periods in our recent history.
Barbadians are putting the memories of economic and social distress of the pandemic behind them. This season of joy will be the first in which people can relish the pleasure of being mask-free and they can hug and socialise in a way they could not for two consecutive years due to fears of disease spread.
The buoyancy in confidence is supported by the economic figures as business activity on the island is ramping up. The recent financial reports from various corporate entities are demonstrating the turnaround.
If we were to examine the end of year results of several companies, it seems the excitement about 2023 is coming on a foundation of real growth in 2022.
Goddard Enterprises Limited, the last surviving true Barbadian conglomerate, has reported a whopping 200 per cent increase in after-tax profits of the group.
The company’s chief executive officer Anthony Ali and its chairman Charles Herbert said the massive increase in corporate profits in 2022 was led by the turnaround in its catering and ground handling operations.
“An increase in airlift and passenger loads from a pent-up demand for travel resulted in an increase in revenues of 84.5 per cent for the Division,” the two directors revealed.
After tax profits of Goddard Enterprises hit $68.20 million, a tripling of the $22.06 million achieved last year.
Goddard Enterprises was not alone when it came to massive profits in 2022. CIBC FirstCaribbean International Bank’s new managing director, Barbadian Mark St Hill, revealed that net profits of the bank for the year hit US$176.4 million, an increase of US$50.7 million or 40 per cent more than what the group attained in 2021.
St Hill explained that the region’s economic conditions, including those in Barbados, had slowly recovered during the year, propelled by tourism services, followed by improved output by other productive sectors.
The Massy Group, though headquartered in Trinidad and Tobago, has significant assets in Barbados, and it too, said 2022 was a great year as corporate profits shot up.
The current administration must certainly be riding the wave of confidence being demonstrated by the local business community and ordinary Barbadians.
The one thing that many Barbadians are concerned about, however, is the level of debt that Barbados has been accumulating in recent times, despite the explanation from Government that now was the best time to borrow because of the low level of interest.
People have expressed worry about the “what ifs”. They worry about the country’s capacity to repay the foreign debt which will require the generation of significant amounts of foreign exchange to meet the debt obligations.
The International Monetary Fund (IMF) has asserted that the island’s debt was sustainable and there were only “moderate” chances that the country would not be able to comfortably meet the repayment requirements.
In its recent debt analysis, the IMF, which has backed the Barbados Economic Recovery and Transformation (BERT) programme said: “Barbados’ overall risk of Government debt stress is assessed to be moderate. This is consistent with the moderate near, medium, and long-term final risk assessments.”
In its own show of confidence in Barbados, the IMF complimented the island for bringing the debt-to-GDP ratio on a downward trajectory after a significant increase due to pandemic-related borrowing.
However, despite the assurances of the IMF, regional rating agency CariCRIS said its positive rating of the local economy could be jeopardised if there was any derailment of the BERT programme.
Though the island has been accessing very low interest rates on loans mainly from the IMF, CariCRIS said its positive rating was tempered by Barbados’ “limited access to commercial international credit” as well as the potential for disruption in our major tourist markets.
Despite these risks, the Barbados economy is performing well, given where it is rebounding from when the economy suffered a sharp contraction of about 16 per cent during the height of the pandemic.
