Barbadians are being advised to tighten their belts in 2024, as high cost of living, inflation, shortages and economic uncertainty are predicted for the
new year.
This is the consensus of three economists, who are warning that global shipping challenges and volatile climatic conditions do not augur well for a bright economic outlook for 2024.
Head of the Sir Arthur Lewis Institute of Social and Economic Studies, Professor Don Marshall said shipping challenges were likely to result in cost increases as well as a reduction of appetite for consumer goods.
Marshall was referring to the diversion of ships from the Suez Canal due to war in Gaza. The alternate route around Africa is expected to add an additional three weeks for goods destined for the Caribbean. Additionally, low water levels in the Panama Canal have now forced authorities there to limit the number of ships allowed through daily.
“In terms of our trade outlook, as it relates to bottlenecks in the supply chain due to issues with various sea lane corridors, I think that we are going to see a hike in prices, a slowdown in some levels of imports. The reality is that as an import dependent country, bottlenecks in the supply chain affect us differently because it would redound to the dampening of demands for consumer goods such as cars and heavy equipment,” Marshall explained.
He pointed out that next year would be the true measuring stick of Barbados’ growth, noting that 2023 must still be considered part of the country’s post-pandemic recovery.
“I think that 2024 will be a very critical year for Barbados. This year, 2023 was about post-pandemic recovery and we are seeing restoration of business activity approaching pre-COVID-19 levels. With that said, there is a need for urgent address of youth unemployment. This should be priority number one in terms of full economic recovery and, by extension, the need for more decent jobs. There are a number of people over 34 that are employed but they are underemployed,” he said.
Marshall’s position was supported by former University of West Indies’ Banking and Finance lecturer Jeremy Stephen. However, he said there was still a chance that economic growth would be recorded, but noted the prospect of inclusive growth was slim. He said next year could be “tricky”in terms of inflation for the average Barbadian.
“We have all of these issues internationally that will affect us, but it does not mean that it will hamper the growth expectation of Barbados. The country can grow; the problem is how growth is always recorded. There is a battle between growth and the share of wealth and that is very clear in a country like Barbados where it really does not allow its citizens to invest, and it is expensive.
“So, the country can grow if let’s say the Government gave incentives to a sector, but while the owners of that sector will benefit from increased profitability, wages of the workers are
