Considering the state of the island’s tourism product and its reliance on that sector, the 0.7 per cent growth projected for the Barbados economy in 2013 is not a good sign.
Ryan Straughn, president of the Barbados Economic Society, told BARBADOS BUSINESS AUTHORITY he believed anticipating such small growth suggested that not much was expected from the island’s struggling breadbasket, and that alone was worrying.
“The short-term prospects are not great,” he said.
“The truth is, if you are starting at 0.7 per cent for the growth for 2013, it tells me as an economist that you don’t anticipate tourism in the first quarter will do anything much – that is really the concern,” said the economist.
The latest Central Bank report noted that there was zero growth in the Barbados economy last year.
“The flat growth performance resulted from a decline in tourism, other traded services and manufacturing.”
Moreover, the Central Bank said revenue from personal taxes was down ten per cent and VAT receipts, two per cent.
Straughn said this decline was testament to the fact that the private sector, including hoteliers, were finding it increasingly difficult to maintain staff and stay in business, adding that “a lot of jobs have been shed in the private sector” over the past two years.
“The structure of the economy is such [that] we rely heavily on tourism to earn foreign exchange . . . and if we are not confident that there will be a decent tourism performance in the first quarter, then certainly it is not a good picture whatsoever,” added Straughn.
The economist therefore recommended that Government move with urgency to focus more on growing the manufacturing sector and building and sustaining the renewable energy sector.
“If we focus on reducing the cost of doing business, specifically to manufacturing, it allows them to produce more – which means then that [their] cost would come down, and therefore the cost of living on what is produced locally would come down,” he explained.
“The truth is that Government can help themselves and they should have been helping themselves for two years now, at least, by investing in renewable energy. . . . It can still make a difference now but the fiscal situation now does not lend [to] a lot of confidence,” added Straughn. (MM)
