Barbados Earning More Forex From Services Sector

by Amanda Banks, Tax-News.com, London

11 November 2005

Barbados has been earning increasingly large amounts of its foreign exchange earnings from the services sector over the last decade, according to figures produced by the Central Bank of Barbados.

Since 1994, the sector's balance of payments surplus has grown from BDS$49.5 million to reach BDS$311.2 million, representing an increase of 500%.

A substantial amount of this growth has been driven by the financial services industry. In 1994, this sector did not contribute anything to Barbados' foreign exchange earnings, but by 2004, financial services were bringing in $159.4 million in forex, representing 22% of the total earned by the services sector, excluding tourism.

While insurance services accounted for the greatest percentage of total foreign exchange earned in the sector at 25%, financial services still generated a greater surplus to the overall balance of payments position.

Insurance services earned $182 million in foreign exchange in 2004. However, they also generated $242.1 million in foreign exchange outflows, for a negative balance of $60.1 million.

Meanwhile, financial services generated a relatively small outflow of $11 million, for a positive balance of $148.4 million.

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