The news last week on the review and progress of the economy during the first quarter of the year must have gladdened the policymakers and technocrats in charge of managing the economy. Given that the world is still in the grip of the receding recession, it must have been heartening to know that our economy grew by 2.8 per cent.
Our economy is not yet out of the woods, and there must therefore be an atmosphere not of gloating, nor celebration, but of cautious optimism; for present factors outside our control are threatening the burgeoning recovery of our economy.
The developments in the Middle East, for example, have spawned an increase in our energy costs, and in a sense this could not have come at a worse time. Such an increase will have its repercussions all over the economy and may retard growth just when we need it to prevent social fallout from a challenging deficit and worrying unemployment.
Indeed, Central Bank Governor Dr DeLisle Worrell made it clear during his recent review that despite the improvement in the first quarter, the tight fiscal policies must be kept in place. The necessity for this approach was clear from his direct language. He remarked that several challenges remained on our horizon and that Government needed to focus very much on fiscal restraint.
When we recall that the economy recorded 0.3 per cent growth last year, the current picture must be encouraging if only because the economy was coming back from a state of uncertainty brokered by the Four Seasons shutdown, the spectre of the imposition of the British Air Passenger Duty and other negative fallout from our major trading partners.
The Government must now continue to improve on its performance in the economy in the face of the continuing challenges, and Barbadians must rise to the task of supporting all those policy initiatives designed to enhance the reduction of the deficit, the preservation of foreign exchange and the reduction of our high import bill of food and other items.
This may not be easy, but will be absolutely necessary since the increases in fuel costs will mean an increase in the cost of other imports, and inflation will continue to be a problem, especially since our tax revenues from international business and financial services have not recovered, even though international business company registrations have increased.
Against this background, we urge the Barbadian consumer to follow the advice of the governor to be watchful, rather than to go ahead and assume that things will be all right.
It is laudable that Government is itself setting the right tone. The governor also told us that a wait-and-see attitude was being adopted on the question of foreign borrowings, and that while there were no immediate plans to go to the international financial market, that would depend on how things eventuated – so borrowing may be done.
We commend this approach for it would not be right to ask Barbadians to be cautious in their business affairs if the Government did not lead by example.
The immediate future is therefore not without challenges, but they appear to be manageable even if dark clouds like the Clico matter and the rising cost of fuel are constant reminders of the hazards demanding our most careful and astute economic management.
