In a mixed assessment of the 2025 Budget, the Chamber of Commerce and Industry has commended the government’s focus on economic resilience and digital transformation. But it warned against a proposed annual two per cent minimum wage hike, saying it could fuel inflation.
At a post-Budget forum co-sponsored by financial services firm PricewaterhouseCoopers (PwC), chamber president Jimmy Clarke highlighted both the strengths and challenges of the Budget, emphasising its holistic approach to balancing economic stability with social and environmental goals.
Clarke noted that adjustments to the minimum wage are necessary to account for inflation but questioned the approach taken.
“While we agree that adjustments need to be made to the minimum wage to adjust for inflation, building in an annual two per cent increase is, in itself, inflationary and builds costs into business,” Clarke said. “The other option would have been to index the increases to inflation.”
Despite this concern, Clarke praised several measures in the Budget aimed at strengthening foreign exchange, government debt management, and improving the ease of doing business.
“The Budget, in our opinion, is strong on foreign exchange generation and reserves,” he said, pointing to initiatives like the establishment of the Barbados Ocean and Coastal Authority to manage marine resources, which he described as critical for tourism and economic sustainability.
He also welcomed the government’s commitment to reducing the national debt, noting that bringing the debt-to-GDP ratio below 100 per cent this year and continuing toward the 60 per cent target over the next decade is a positive step. Clarke also shared the Chamber of Commerce’s support of the transition to net-zero energy by 2035 and investment opportunities in renewable energy.
He further backed the requirement for businesses to have water and electricity backup for continuity during severe weather events but cautioned that the two-year transition period might be “a bit onerous, given the cost of this equipment”. Additionally, he praised tax relief efforts, including the extension of the VAT waiver on water tanks and pumps, as well as the removal of VAT on essential food items to ease the cost of living.
Clarke also highlighted the importance of strengthening digital infrastructure, particularly the upgrade of the Automated System for Customs Data (ASYCUDA) to ASYCUDA 5, which is expected to improve customs processing and trade efficiency. Despite his concerns over the minimum wage increase, Clarke said the Budget takes “a holistic approach” in balancing economic stability, social support, and climate resilience, stressing that the chamber remains committed to working with the government on policies that support business growth. (SM)
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