Barbados Central Bank Governor Predicts Economic Upswing In 2003

by Amanda Banks, Tax-News.com, London

03 February 2003

Speaking to reporters on Thursday, Governor of the Barbados Central Bank, Dr Marion Williams revealed that the jurisdiction's economy has almost pulled itself out of the recession which first took effect in June 2001.

According to the Barbados Daily Nation, Dr Williams announced that the economy declined by 0.6% in 2002, compared with a drop of 2.8% the previous year, and predicted growth this year of between 1.5% and 2.5%.

However, she admitted that this figure was largely based upon the assumption that the growth in tourism which began in the latter half of 2002 will continue uninterrupted.

Speaking with regard to the possibility of an US-led war on Iraq, Dr Williams observed that:

'Should the war...materialise, value added in tourism is likely to fall by approximately 3% and overall output could register a decline between 1% and 2.5% depending on the timing and duration of the conflict.'

The Daily Nation reported that the Barbadian budget deficit currently stands at 5.4% of GDP, its highest level since 1990. However, according to the Central Bank Governor, this is set to drop to around 4% as the resumption of economic activity should lead to an higher indirect tax take.

'However, direct taxes should be lower than in 2002 with the implementation of fiscal reforms which will result in downward revisions to the rates of personal and corporation taxes,' Dr Williams concluded.

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