Barbados Bank Governor Downbeat On Economy

by Mike Godfrey, Tax-News.com, New York

01 August 2002

Barbados Central Bank Governor Dr Marion Williams followed earlier warnings on the state of the Barbadian economy by telling a press conference yesterday that the unemployment situation is likely to deteriorate further.

Dr Williams predicts that the current recession will continue for the rest of the year, although the second six months should show an improvement over the first half.

“The Barbadian economy is not expected to exhibit signs of recovery before the first quarter of 2003, with current projections suggesting a decrease in real economic activity of about three per cent of gross domestic product for 2002,” she said.

The Governor said that 2,200 jobs were lost in the first quarter of 2002, with the unemployment rate rising to 10.3%, one point higher than last year. To help improve the employment situation, Dr Williams said the Central Bank was encouraging the growth of small business by extending the guarantee facility to credit unions which qualified, based on the strength on their balance sheet.

She said the back pay given to civil servants and expected tax cuts should boost spending and help the economy, which she thought was just experiencing a temporary blip.

“I think we are experiencing an economic slowdown . . . that it is temporary. Unless something dramatic happens to impact on our major sectors further, and that something would have to be like September 11, I see the tourism sector recovering. As long as the tourism sector recovers, I think the Barbadian economy can do reasonable well,” said the Governor.

Not everyone agrees with Dr Williams about tourism, however. Peter Morgan, a minister of tourism in a past Democratic Labour Party (DLP) Administration, told a meeting on Sunday that it was clear there were problems before the September 11 terrorist attacks on the United States, but no one wanted to recognise them.

Claiming there were now 20% fewer hotel rooms available than ten years ago, Morgan said the lack of brand name hotels contributed to the country’s failure to attract enough visitors, especially Americans who liked to stay somewhere they “could get the same hamburgers”.

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