In its economic review of 2007, the Central Bank announced that economic growth was well above the 3.1% average of the previous five years, with economic output again driven by the non-traded sectors. Output in the traded sector also grew after two years of stagnation, the Bank stated, underpinned mainly by tourist arrivals associated with the 2007 Cricket World Cup.

In the international business and finance sector, the Bank announced that 470 new licenses were issued to international business and financial services firms during the review year, compared to 537 in 2006. There were 334 new international business companies registered in 2007, a decrease of 57 companies compared to the previous year. In addition, 126 societies with restricted liability, six exempt insurance companies, one exempt insurance management company and three new offshore banks were approved for operation.

In the fiscal sector, the Bank stated that total expenditure is estimated to have risen by 6.8%, and total revenue by 5.5%. The fiscal deficit as a percentage of GDP therefore rose slightly. The deterioration in the fiscal position reflected a rise in current expenditure relative to a moderate increase in tax revenue, the Bank explained, adding that fiscal deficit is expected to grow, based on planned government expenditure and continued sluggish growth revenue. Given the high level of liquidity in the banking system, the Central Bank anticipates that the government will once more rely on domestic financing for its projects.

Looking ahead, the Bank predicts that the international environment will play a significant part in the performance of the Barbadian economy in the coming year. In 2008, economic activity in Barbados is projected to grow between 3.0% and 3.5%, based on currently available information. However, these estimates are likely to be revised, depending on the magnitude and duration of the expected recession in the United States. The Bank also warned that the impact on Barbados is likely to be greater if the US recession spreads to Canada, Europe and the UK.