Barbados’ economy is expected to see a growth of 1.9 per cent in 2017.
Outlining these projections, the Economic Commission for Latin America and the Caribbean said that this would be underpinned by continued growth in the tourism and construction sectors.
According to its Preliminary Overview of the Economies of Latin America and the Caribbean report, Barbados has recorded positive economic growth in 2016, expected to be at 1.4 per cent of GDP.
This, has been driven largely by a three per cent growth in tourism in the first nine months, lending to a recovery in activity in the construction sector.
Pointing out that the current account deficit of the balance of payments was decreased to 2.4 per cent of GDP, owing to more exports and low imports, the report showed that the government remained concerned over the high fiscal deficit at an estimated 6.4 per cent of GDP, coupled with high gross government debt stock, which stands at 107.7 per cent of GDP.
“The government’s fiscal consolidation efforts have been slow to yield the expected results. The Central Bank of Barbados projects the fiscal deficit for fiscal year 2016/17 to be 6.1 per cent of GDP (down from original estimates of over eight per cent of GDP), which is a smaller deficit than the 7.5 per cent of GDP posted in fiscal year 2015/16, but still in excess of sustainable levels,” the report noted.
Highlighting government’s newest fiscal adjustment measures aimed at boosting revenues including the National Social Responsibility Levy, a two per cent border tax on the customs value of all imports, an increase in the Bank Asset Tax, a tax amnesty and the sale of Barbados National Oil Terminal Ltd and of containing expenditure with a cut of $200 million in statutory transfers and subsidies, along with an across-the-board reduction of up to BDS$50 million in discretionary spending, the report said that concerns persisted regarding whether these initiatives are sufficient to contain or reduce the gross government debt stock. (JMB)
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