Declaring that “we are back as a country and an economy”, the Governor of the Central Bank of Barbados Dr Kevin Greenidge said the economy grew by four per cent to an unprecedented value of $12.8 billion.
In his review of the island’s economic performance last year, Greenidge told a news conference that Barbados was able to reach this position due to two years of solid growth.
The report card revealed that the economy expanded by an estimated 4.4 per cent in 2023, thanks to another robust performance of the tourism industry and that this level of improvement is expected to be repeated during the coming fiscal year.
But Dr Greenidge advised that it is now necessary for the country to build on that growth consistently into the medium term in such a way that citizens of all social and economic backgrounds can share in the pie sustainably.
“My call to action to get that going is we need every person to play their part, particularly the private sector…in terms of foreign direct investment, to take confidence in where we are and invest in growing the economy. There is no better time now…in terms of confidence.
“If you want to be part of this expansion which will redound to the benefit of all, [there’s a need] to invest. As I say, we want to double the private sector investment…. If we can do that this year, into next year, into the medium term, particularly the private sector, and government continue, and we can continue with the state-owned [enterprises] reforms to get the efficiencies where those savings can then continue with the government capital programme, then we can get the four per cent growth this year or more,” he said.
The governor stressed that once the economy can maintain a strong growth rate into the medium term every year, Barbados could become “most unrecognisable”.
“We are at the cusp,” he told journalists. “It’s like going into the gym; you exercise for a year, you bring your weight down perfectly, and after that, you realise nothing is happening. You need something else, something to move you beyond that point. Growth and investment are what we are going to need… sustained, substantial growth, and now is the chance for us to play our part…now is the time to invest. If we can do that, we can make this transition to first-world status over the next couple of years.”
Reflecting further on the economy’s 2023 performance, Greenidge reported that tourism’s strong showing in its second year of recovery since the COVID-19 pandemic has been bolstered by increased airlift capacity, intensified promotional initiatives in key source markets, high-profile cricket events and the vibrant revival of the Crop Over Festival.
He explained that the sustained growth in tourism has been a catalyst for expansion in the non-traded sectors, particularly energising construction, wholesale and retail, and the business and other services sectors, which underscored the way the economy is interconnected.
Greenidge disclosed that tourism arrivals had increased by 18 per cent over 2022.
“All markets showed strong improvements,” he stated. “UK arrivals were 4 per cent up on 2022, but also 8 per cent above its pre-COVID levels…. CARICOM increased by 51 per cent over 2022, and we had an almost 60 per cent increase in airlift capacity coming out of CARICOM,” he announced.
The United States increased by 19 per cent while the Canadian market was up by 38 per cent. Both Canadian and CARICOM markets were still slightly below the pre-COVID period.
“Collectively, we are about 7 per cent down, but the US market is still lower than the pre-COVID by 10 per cent … the Canadian market by about 15 per cent, and CARICOM market [by] about 10 per cent. So, the story is tourism has rebounded very strong,” the central bank governor said.
He identified high ticket prices and limited airline capacity as the constraining factors standing in the way of greater airlift, and suggested a continued collaborative approach to marketing to unlock some of those challenges to air travel.
Greenidge pointed out that tourism fed into other sectors of the economy, resulting in across-the-board benefits, generally.
The economist said that in agriculture, noting that although food crops showed impressive performance, the extreme heat in particular, and some inconsistency in feed quality, meant that milk, chicken, and other meats were down relative to the previous year. He noted that this mixed fortune pulled down the growth in that industry.
“In manufacturing also, while the overall sector was up, non-metallics were down because of the cessation of the production of clinker by the major cement producer in Barbados; and that lowered that overall sector output, while we had increased output in beverages, rum and other food exports and manufacturing,” the bank chief reported.
He said construction also achieved a strong showing as it fed off the tourism uptick with the completion of several projects, thus pushing the building industry’s growth by six per cent.
Businesses, including wholesale and retailers, also benefited from the robust tourism performance.
emmanueljoseph@barbadostoday.bb
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