Economy of Barbados in Trouble

Bridgetown._ The Barbados economy is in recession, according to the Barbados Economic Society.

In 2002, the economy declined by over three per cent for the second and third quarters and it is expected that the decline would be even more dramatic for the fourth quarter. In essence the economy would have declined for three consecutive quarters.

Above and beyond the real GDP figures, the Barbados economy showed signs of deterioration in the first quarter of 2001 when in excess of 2000 workers lost their jobs at a time that economic growth was positive.

In recent times, it has become difficult to assess the true state of the Barbados economy. This difficulty in determining the performance of the economy surfaced in April of 2001, when the Governor of the Central Bank announced that the economy grew by an estimated 3.9 per cent for the first quarter. This figure was later revised to 2.0 per cent in the bank’s economic review for June. And in his budget of early August, Prime Minister Arthur put a figure of 1.7 per cent in the public domain for the same first quarter period.

In essence, within a short space of time there were three different figures describing the growth in the economy for the first quarter of 2001. More important, the figure moved by 2.2 percentage points or a difference of almost 60 per cent – this is major by any standard.

There is no doubt that the information, particularly for tourism is questionable. Indeed the president of the Barbados Hotel and Tourism Association (BHTA), Allan Banfield questioned tourist arrivals data in 2001, when he said “Those of us on the ground may not fully agree with those statements. Can it be that the arrival figures are flawed as many have said for years?”

In the midst of all the uncertainty surrounding the state of the economy the Prime Minister presented his budget with two broad policy objectives of which the more important was “to stimulate economic activity in the short term so that Barbados can be restored to