By Emmanuel Joseph
Canada-based Barbadian economist Carlos Forte has given a “cautiously optimistic” outlook for Barbados’ economic fortunes in 2014.
“I am cautiously optimistic about the prospects for 2024, both internationally, and in the case of the Barbados economy in particular. The performance of the economy would be an indication whether or not the country is on a path of sustained economic growth,” he told Barbados TODAY in an
interview.
“And I say that because most of the growth heralded so far has really been on account of a slow recovery; and when I say slow, it has taken over the course of 2021, 2022, 2023…a slow recovery of the pandemic recession. The forecast which the Central Bank and others have [is] that the economy will grow somewhere between four to five per cent; that is if it is genuine growth…that is, growth not fueled in part by the price crisis. And then, of course, that would be welcomed.”
A frequent commentator on the Barbadian economy, Forte, a senior consultant and project manager at the Toronto-based Altus Group, underscored the need especially for growth that is not only driven by improved tourism but through the implementation of many of the construction projects that were touted for almost a decade.
He also welcomed growth that stems from the removal of obstacles to the alternative energy sector related to restrictions in grid capacity.
“If there is growth on account of a lot of the lofty budget initiatives from last year, with respect to diversifying the economy and film and art, life sciences and all of those things which we haven’t really seen the foundation or the groundwork for those initiatives taking hold… that too, would be welcomed,” Forte said.
At the same time, he expects this year to be as challenging as it was last year mainly due to the geopolitical issues – war in Ukraine and Gaza.
Forte also identified other challenges as the problems with shipping in the Suez Canal and Panama Canal.
“On the bright side, major central banks have signalled [and] many economic thinkers and financial markets are expecting that major central banks will begin to reduce interest rates this year,” the economist explained. “It is somewhat expected that inflation will get closer to the target of two to three per cent during the course of this year. That doesn’t mean prices coming down, but it means the rate of price increases in the developed countries returning to what economists will consider a more natural path that does not erode wellbeing.”
He said the United States economy in particular has shown to be very resilient and, therefore, a recession is not anticipated.
The major industrial nations are on course for what the central bank leaders described as a soft landing, said Forte, which means that an interest rate hike did suppress demand enough to plunge economies into recession.
“So, that is good news,” he added. “The outlook, I think for 2024 globally, is not as negative as some commentators have focused on. The other geopolitical issues related to freight, shipping and those types of things… should not necessarily result in higher costs for Barbadians because, if anything, freight charges would only be going back up to where we saw them peak during the pandemic… and prices had already risen to account for those freight charges.
“So, I think that the environment in 2024 generally, should overall be more favourable than it was in 2023, which should spell good news for Barbados in terms of the environment in which we are operating. The prospect of interest rates going down as well should also ease Barbados’ debt servicing on account of those favourable interest rates that we heard about early last year or in 2022.”
Forte submitted that interest rates globally will decline slowly while stressing that this country will benefit because its debt servicing obligations should drop exponentially considering that much of the recent foreign debt is linked to these rates.
emmanueljoseph@barbadostoday.bb
