AFTER putting his neck on the block in January by predicting significant economic growth in the first quarter of 2011, Central Bank Governor Dr DeLisle Worrell has had his forecasts justified.
The island’s lead economist revealed yesterday that the Barbados economy grew by 2.8 per cent – led mainly by an “encouraging” winter tourist season.
What’s more, as the country slowly climbs out of a crippling recession, Worrell is again suggesting that a two per cent recovery by year-end was achievable.
The island’s foreign reserves stood at $1.47 billion at the end of March, $20 million more than was recorded at the end of 2010.
The list of encouraging news on the local economy included a whopping 15 per cent increase in tourist arrivals from the key British market, while the American market continued to improve, registering seven per cent growth.
The international business sector, from which Barbados gets almost 60 per cent of its corporate tax revenue, saw a six per cent increase in the number of active companies at the end of March, reaching 2 411.
“Tourism receipts contributed 60 per cent of foreign exchange inflows in the first quarter, with other services, mainly international business and financial services contributing a further 12 per cent,” he noted.
Another positive was an improvement in construction activity, and the Governor confirmed real economic activity in 2010 was indeed 0.3 per cent growth and not the estimated 0.4 per cent contraction.
The most recent unemployment numbers showed a drop from 11.2 per cent last September to 10.5 in December, though it remained 0.5 per cent higher than at the end of 2009.
According to Worrell: “Preliminary estimates suggest an improvement of $90 million in the fiscal deficit compared to the 2009/2010 fiscal year.”
He added: “Tax revenue grew by four per cent over the fiscal year, largely due to the changes in tax rates announced in the 2010 Budget, especially VAT revenues, which grew by 13 per cent.”
But even in an overall encouraging report for the first quarter, Worrell cautioned that the country’s foreign exchange earnings fell short of import demand by an estimated $45 million as imports of consumer goods grew by 15 per cent.
