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Barbados Central Bank Says US And Britain Key To Recovery

by Amanda Banks, Tax-News.com, London

07 February 2002

In its recent economic review of 2001, the Central Bank of Barbados warned that the low-tax jurisdiction's fate over the next year is tied to that of the United States and the UK.

'The outcome for 2002 will be determined by the speed of recovery in the economies [of] Barbados' trading partners, especially the United States and Britain,' it said in a statement last week. 'Current projections suggest that real output in Barbados should remain relatively flat, but if the anticipated pick-up in the United States is strong enough to stimulate global demand, then a small rise is likely.'

Unsurprisingly, given the tragic events of late 2001, the Central Bank revealed that after eight consecutive years of growth, the Barbadian economy contracted last year.

The Bank predicted that the fiscal deficit for 2002 would be between 3.5% and 4% of GDP, putting this down to a reduction in corporate tax revenue and a lower level of economic activity.

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