Barbados: Economy grows... but economic growth below projections for 2006
Barbados' economy has maintained its growth trend expanding by 3.5 per cent last year.

However, the growth was below the original projections of four to 4.5 per cent, which the Central Bank set for the year just ended. Governor of the Central Bank of Barbados, Dr. Marion Williams, hosted a news conference yesterday at which she reviewed the performance of the economy for 2006.

She told the media that "2006 was the fifth consecutive year of expansion of the Barbadian economy". Though this rate is lower than what was predicted, it is significantly above the average rate of 2.8 per cent for the last five years. The non-traded sectors were again the driving force of real economic output.

Although estimates have placed Barbados' economic growth as not as high as predicted, the Governor explained that there are a number of positives to the economy. With respect to last year, the significant pluses in the economic performance, according to Dr. Williams, "were the improvement in the current account balance of payments, the improvement in the fiscal deficit, the containment in the surge of credit, the slowdown in import growth, improved employment, the apparent rise in international financial services sector, even manufacturing is continuing to grow even though the rate is not as high as in prior years and the improvement in the debt ratio are significant in terms of growth".

Regarding the concerns in the economic performance of the 2006, the Governor said that most of the country's growth continues to be led by the non-traded sectors. She said, "this requires a restructuring of the economy." She reasoned, "the inflation is a concern but it is not something that is controlled by policy makers as it is result of high rise in oil prices".

Speaking to specific sector performance within the economy, the Governor said that the tourism grew 2.5 per cent, reversing the 2.2 per cent decline in 2005. The rise in long-stay tourist arrivals more than outstripped a fall-off in cruise passenger arrivals. Though cruise-passenger arrivals were disappointing in the first half of 2006, they recovered to post overall contraction of 8.1 per cent which marks a significant improvement on the 21.9 per cent fall off for 2005.

The manufacturing sector's total output increased by only 0.2 per cent, after two years of growth averaging 2.7 per cent. Reflecting on foreign demand for Barbadian manufactured goods, the Governor told the media briefing, "value -added in the electronics components industry grew by ten per cent. Food processing grew by 1.5 per cent, however output contracted in the wooden furniture, chemicals, beverages and tobacco industries".

As many have placed the construction industry as a key to the Barbadian economy, the Governor maintained: "Following growth of 13.5 per cent in 2005, real output in the construction industry is estimated to have advanced by a further seven per cent during 2006, as work continued on Cricket World Cup (CWC) related projects and other private and public ventures".

According to Williams, "output in the agricultural sector declined during 2006, as the production of raw sugar fell below 2005's level. The cane crop yielded only 33 701.8 tonnes of raw sugar, 12 per cent below the previous year's total ..." She also noted that milk production, fish catches and chicken production all declined 13.4 per cent, 5.7 per cent, and 5.7 per cent respectively.

Source: barbadosadvocate.com