Central Bank of Barbados Governor Cleviston Haynes delivers the Bank’s review of Barbados’ economic performance in the first nine months of 2018 and takes questions from members of the media.
Central Bank Economic Review of Barbados’ Economy January to September 2018
Discover more from Barbados Underground
Subscribe to get the latest posts sent to your email.
168 responses to “Central Bank Economic Review of Barbados’ Economy January to September 2018”
-
What Is A “Primary Surplus”?
By Matthew Yglesias
One crucial concept for understanding the Eurozone crisis or sovereign debt dynamics in general is the idea of a budget that’s in “primary surplus.” What does that mean? Simply put, it means that tax revenues exceed program spending — i.e., spending if you ignore interest on outstanding debt. But what’s the significance of that?
I don’t normally like to explain public finance in terms of analogies to household budgets, but in this case I think it’s illuminating. Imagine a household where current month-to-month expenses are lower than income. You have a salary, in other words. Then you deduct taxes and health insurance premiums and then you pay the rent and the utility bills and the groceries and the care insurance and gasoline and other basic expenses and you’ve got a positive number left over each and every month. You should be in good shape. Your income exceeds your expenses, so you’re prepared to save up for vacations or new purchases of durable goods or the occasional luxury. But you have a problem. Several years ago you wracked up a ton of credit card debt traveling to your friends’ destination weddings even though you really couldn’t afford it. So today in addition to all those basic expenses you have to pay interest on the outstanding debt. You’ve got a primary surplus, meaning that income > expenses but an overall deficit meaning that income < expenses + interest. What are your options? Well you can cut expenses to shift into overall surplus (austerity), you can declare bankrupty (default), or else you can try to refinance your debt (bailout).
Here I think it’s best to exit the analogy since the options look different for a household than for a country. A person declaring bankruptcy is quite different from a country defaulting, but the bottom line is that an entity (be it a household or a firm or a government) with a primary surplus is in pretty good shape. All you need to do to get fully into the black is to stop making payments on your debt. The biggest price you’ll pay for this is that you can’t borrow any more money. But with your primary surplus in place, you don’t need to borrow any more money. It’s your creditors who have a much more fundamental problem. Unless they can find a way to coerce you into austerity, they’re going to wind up eating a loss one way or the other. If the bankruptcy code is sufficiently favorable to the interests of creditors, they may be able to do this. In an international context, it may be possible to send in the navy to blockade ports and demand payment.
-
The primary surplus is expressed as a PERCENTAGE of the GDP. The GDP is not going to be static over the next few years. Therefore it follows that a declining the GDP will put the ambitious targeted primary surplus (i.e. 6%) within reach. It is another useless policymaker’s metric to keep audiences impressed.
-
It must be clear to all by now – that if the Windies want 2 devastating SPINNERS !
They can recruit the services of David BU and David Ellis of VOB !
Those are 2 gems of a spinner !!
-
Especially when Sinckler and Stuart are the batsman! -
What else can I be…
-
QUESTION: did not Clyde Mascholl one of the PM’s advisers say at one time that Barbadians can’t handle any more taxes. Increase in water bill due to increase taxes, increase in food prices not as a result of NSRL because that has been taken off. Increase in parking fees at the GAIA
-
Another set of vodoo economics. that would keep barbados backs pressed firmly against a brick wall.
Nothing which will impress the average barbadian whose savings would dwindled to nothing while creating huge losses in their inability to secure a finacial nest for themselves
In the meanwhile looking down a barrell of hopelessness asking of themselves “what must they do now” -
Whatever fancy double speak the Mia government comes with now…it can never negate the reality that the bajan population who ELECTED HER GOVERNMENT to their taxpayer funded parliament will have a very tough 2 years ahead…
….and as Verla said……nearly 6 months later and lots of ….”we have evidence”…and “we will pursue the thieves” told to the people by Mia pre and post election….no one in the former DLP government or the in minority community responsible for the cprruption that ripped off the people..have been arrested for the missing hundreds of millions gone from the treasury AND pension fund….belonging to the people..
http://www.nationnews.com/nationnews/news/209740/-tough-ahead
I must reiterate…the money stolen FROM THE PEOPLE….did not belong to Mia…she does not get to say…it’s ok, the thieves can keep it and the people will just have to sacrifice AND suffer…and start over….and adjust ….particularly with her government ministers abd fellow lawyers who are also well known thieves…polluting the cabinet….
…that means she cares not one damn that the people lost everything because of her thieving friends, fellow lawyers in DLP AND the minority thieves she obviously answers to….as her masters.
-
It is worth repeating – what political parties promise on a campaign will never gel with their actions when they win the government. There is the evidence from Barbados and elsewhere to support. The political class across countries has been losing the trust of the citizens.
-
Mr Blogmaster be careful with <em>"...what political parties promise on a campaign will never gel with their actions when when they win the government."</em>There is a certain demogogue leader who has put the lie to that (as best as he could) so going forward we need to either be careful what we promise or expect some supposedly just for show type promises to be completed by bold and brassy new entrants to the political scene….. cue Mr Philips!
-
The airport parking fee increase was a ‘low picking fruit’ just waiting to be taken………….it will now be similar to other airport parking fees eg: Miami, Toronto, etc …..let’s just hope we see some results from the monies collected. Suggestion: erect a huge cover over the car park…fill it with solar panels and generate some ‘free’ electricity wile providing sun shade and rain protection ………..
-
This govt cannot escape the reality that creating growth is compulsory component and essential to securing the financial economic stabilty of a country
Barbados has lost its way many years ago by depending on the financial sourcing called borrowing of building its economy instead of sourcing from a reservoir of knoweldge engrained in the older generation
Now the chickens have come home to roost and all and sundry is expected to pull an overladen basket of govt debt
I dont think so -
KS @7.54am
There is an airport in India,one of the country’s largest, that has switched fully to solar power a few years ago and sells excess electricity to the neighbouring homes and businesses.Barbados is just talking about our natural resources but is showing its lack of independence by being prevented by a foreign entity from going renewable.Ask Bizzy,Adrian and Wilfred if there is any doubt to this claim. -
Somewhere in the news I am sure I heard the GCB declare that we are starting to see the light at the end of the tunnel. If what I believe I heard is correct, that would be the biggest piece of sick humor ever uttered by man or beast. Ten years of seeing the headlight of an on rushing train morphs into light at end of the tunnel in six months? Gimme a break.
-
There has been some criticism of the government regarding its commitment to the renewable program started- to its credit- by the last government. Could it be that this government is looking at oil exploration? What is Liz Thompson whose Master’s thesis covers the subject advising government?
-
@FearPlay
To be fair to the governor he indicated government is rolling out its plans so far so good. Once it continues to meet its IMF targets the expectIon is that it will sow the seeds of confidence to attract private invest to spur growth.
-
People are asking why the Mia government gave Cow Williams a contract to resurface a part of the highway above the Hothersal Turning roundabout that is one of the better roads in Barbados and in THEIR opinion, did NOT need resurfacing, when there are so many deplorable roads on the island needing remedial work..
-
They want to know why Mia is already wasting taxpayers money on these crooks unnecessarily…and who in the government will likely be getting kickbacks for unnecessary roadwork.
-
More of the same–misinformation. Stupse! #nocredibility
-
Enuff 68 yardfowll…stop lying…that stretch of the highway…IS BEING RESURFACED, as you well know yardfowl skunk that ya are when driving by the Hotherasal roundabout with all those BLUE cans placed there that are themselves a road hazard..
There was absolutely NOTHING WRONG with that stretch of highway, as people are saying it was one of the few better roads still in good condition on the island …ask me how I know so that I can tell ya..
people have been talking for weeks about the amount of work being given to COW..but somehow it is not to fix the most deplorable roads..so…the next natural and intelligent question to ask is…WHY…and who is benefitting from this clear scam on the taxpayers…
it is not Mia’s or any of the other government ministers money to do with as they please…it’s bad enough that she is yet to recover a dime of the many hundreds of millions stolen by her DLP friends and from the Pension Fund by the same Cow…or even lock any of them up…but the people whose money it is have a right to question it, given the BLP history of corruption with the same Cow and Bizzy..and Maloney and whosoever pays lowlife lawyers and ministers bribes.
-
@Enuff
all you need do is direct bloggers to the publicly posted Tender Request, and the results of bids upon the opening of Tenders received. This is standard operating procedure pretty much everywhere. -
Barbados’ economy contracted in the third quarter, registering a 0.5% decline.
The update was provided by Governor of the Central Bank of Barbados, Cleviston Haynes as he presented the Bank’s latest economic review.
Negative growth of 0.25% to 0.75% is forecast for the island for 2018.
Mr. Haynes says prospects for sustained recovery will be influenced if the island meets the targets set by the International Monetary Fund.
Meanwhile, he also revealed that the unemployment rate currently stands at 9.2%.
Governor Haynes says strong adjustments for Barbados are required, and public sector reforms are crucial to medium term recovery.
He says there’s a commitment by Government to achieve the set targets.
-
Mariposa,
The economy is in recession. There has been no BLP bounce. No mad rush by foreign direct investors to splash out in Barbados. Local business people have not invested, nor indicated their intentions to invest, since May 24. All we have heard about are loans – the IMF, CDB and IADB. It is more of the same.
-
The island economy can not recover on taxes and revolving credit to pay debt
The similarities to a dog chasing its tail is the same
The model of borrowing to pay debt is flawed readin why so many small island nations find themselves in long lasting financial problem
Now is the time for govts to retool their educational system one that can create a system formulated on paradigm of activity which can deliver entrenpueurs who can create or produce products on the same level of other countries within a global market to create a firm foundation for growth for barbados
Barbados must be rolling in his grave getting.
I told u so would be his final speech -
Fractured BLP I concur with your statement. David of BU is an amazing individual. I like him but his disliked of the DLP is very apparent and his beloved Mia Mottley and the BLP can do no wrong. An extermely bias individual.As for David Ellis the little said about that character the better it is for all of us. An equally bias individual just like David of BU
-
Barrow must be rolling…..
-
So true, especially after the DLP conspired to lose the St. John seat.
-
No the constituents of ST. John also drank the koolaid
The same kind that was served to you
The same kind that has left u dootish
The same kind that is leaving bitterness in the mouths that are feeling the pain of taxation -
Mariposa…ya do know that none of DLP will ever be allowed in the parliament again after what they did to the people, especially how they left the people of St. John to linger in 60 years of suffering and poverty while the ministers and lawyers filled up their own pockets…the people know they were just using them as voters to be elected over and over..those people will never forget, the younger people cannot stand DLP..the older ones have mostly died off…yall are done.
-
WARU
Verlarly,you better tell that to the madam with the fish monger delivery.She thinks she has the potion for the resurrection of the Dead Labour Party.Anything else is treason. -
Eric Lewis poking fun at the Dems
“Government in power for 5 months,5 freaking months and yardfowls quarreling and want to know where the skyscrapers,streets of gold and land of milk and honey is.You never cook in a dirty kitchen,you clean first and trust me,the last users of this kitchen left it stink as hell.And did I mention that them thief de damn stove,pots,pans and knives and forks?”
-
The Dead Labour Party! Ha ha! No resurrection either. Let us hope the BLP doesn’t become the Buried Labour Party! The people cannot stand any more of the same. They have tried the ballot box. Not sure what they’ll do next time.
-
David is just an optimistic person who wants to give the new government a chance. He lives in hope. He is just watching and waiting. What’s wrong with you people?!
-
One of he interesting point hinted at by the governor in his presentation was that so far only one company had applied to the Regulatory Sandbox for authorisation.
If this is mMoney, it raises all kinds of rather interesting questions, including the composition of the new regulatory body, who will carry out the risk assessments, who are the members – or the group of experts – on which the regulatory review body will draw.
What should be of concern is that cryptocurrencies – and the new digital payment systems – emerged between 1998 and 2018 – Bitcoin itself was created in 2008.
The global banking crisis of 2008 occurred because financial engineering had gone ahead of regulation. Not even the experts, including the ratings agencies, understood the mechanics of what was under the financial bonnet. All over the world, economies with more sophisticated regulators, engineers and financial analysts have steered clear of cryptocurrencies. Sadly, the governor was not pushed on the issue.
But, there is no reason why we should not do so on BU. -
@Donna November 1, 2018 4:14 PM
Donna where exactly will i find this place called/name Hope. I am think i may want to relocate there?
The other Hope i know about is in Hampstead County, South West Arkansas. Their claim to fame is it was the birth place of President Bill Clinton and Arkansas Gov Mike Huckabee, and Sarah Huckabee Sanders (current DJT Press Secy)
Very surprising they have all left Hope Arkansas; to call somewhere else home. I guess Hope is all its made out to be? 🙁
-
@ Donna
what is happening with you? and what is happening with David (BU)?
Where were you when the constitution was changed to bring back one man to Barbados?
Does that not strike a chord within you OTHER THAN THIS COOLAID SONG CALLED HOPE?
Where were you when a 5% increase was voted by this 30-0 government, the same government that creid out that the DLP government was too big?
Where were you when this government sent home people without a paycheck and will be sending home some 2500 by Xmas?
Where were you when this government, AFTER BRING HOME THAT MAN, CHANGING THE LAWS AND MEKKING HE A SENATOR, tured around and unilaterally endorsed his MyMoney scam?
Did any of these things go to a public tender?
Are you smoking marijuana on the sly Donna when you say “…David is just an optimistic person who wants to give the new government a chance. He lives in hope. He is just watching and waiting. What’s wrong with you people?!…”
You really got to be kidding me though!
Steupseee
If she is being dishonest and despotic in the little things what de badword you think she going do when the big things come to the table?
-
@ the Honourable Blogmaster, your assistance please with an item here for the overzealous Donna thank you
-
“They have tried the ballot box. Not sure what they’ll do next time.”
You HAVE to get rid of the BLP…they have already started the corruption with the same disgusting thieving fraudulent minorities that they have done the same corruption with before which caused the electorate to kick them OUT in 2008… …they are doing the same thing DLP did..it is all they know, stealing from the taxpayers and pensioners…corruption, steal from the people and launder everything in offshore accounts…take bribes for selling out the people who elected them to parliament,,
BLP gotta go.
-
@ac
ac “Barbados’ economy contracted in the third quarter, registering a 0.5% decline”
GoCB: Preliminary data suggest that economic activity in Barbados contracted by 0.5% during the first NINE MONTHS (emphasis added)ac “Negative growth of 0.25% to 0.75% is forecast for the island for 2018.” (forecast = expected)
trueac; “he also revealed that the unemployment rate currently stands at 9.2%”
GoCB ” The average unemployment rate for the four quarters ending June was 9.2%, compared to
10.0% at the end of June 2017″ (he said nothing of current rates)ac “Barbados has lost its way many years ago by depending on the financial sourcing called borrowing of building its economy instead of sourcing from a reservoir of knoweldge engrained in the older generation”
False. Barbados never borrowed to build its economy. It borrowed to pay bills, and those bills constantly exceeded its revenues.
-
@ Hal
All over the world, economies with more sophisticated regulators, engineers and financial analysts have steered clear of cryptocurrencies.
xxxxxxxxxxxxxxx xxxxxxExcellent point you can be sure that something is amiss in Barbados with this operation.
-
Is this the loan agreement that is funding the road works:
https://www.iadb.org/en/news/news-releases/2015-11-20/barbados-transport-and-road-maintenance%2C11328.html. -
Gabriel…we don’t mind Mariposa exercising her right to criticize the government as a citizen, it is her civic duty, but we do not want her getting any ideas..lol
https://www.facebook.com/jackie.stewart.965/videos/907882309421309/?t=439
-
Enuff ion Wonderland…in whose name was the IDB loan borrowed…who has to pay it back…do you and Mia have the money to pay back that loan??
-
Piece @ 4:06
The best cartoon by far.This one out de top drawer where bajanism and humour are concerned.Wuhloss de dog dead.
-
“Mariposa…ya do know that none of DLP will ever be allowed in the parliament again”
This is not true. The way these novices are going, we will once again be faced with the lesser of two evils or election of a third party.
With “land terrorists” in position of power, the DLP may soon be reincarnated as the lesser of two evils. -
It is only a matter of time before some of our young make the decision to find work overseas due to the mismanagement of the country. Below is a cautionary tale. It should be a reminder to us all that corrupt regimes ultimately endanger the lives of their citizens by deliberately removing hope and economic opportunities to the masses whilst they – the government – engage in corrupt practises. Which often leads to their citizens making bad decisions in their desperate attempt to flee their country of birth.
As for the contribution from the Central Bank of Barbados Governor Cleviston Haynes? …………He is not paid or employed to speak the veritable truth.
-
@ Hal,
Off message. Apologies to Piece.
How’s this possible? -
Sir Fuzzy
Hope is a place where David lives. I did not say I live there with him.
Piece,
What is over zealous about me?
-
Theo…I think the electorate …after this BLP experience…will get the drift that it is time to STOP electing political parties.. completely…..and elect individual candidates instead, grade them based on PERFORMANCE ONLY…if they do not perform>>>KICK THEM OUT OF THE PARLIAMENT…do not ever give them 2 terms and an opportunity to get any pensions…UNLESS…they perform and work for their salaries…..do not give them more than five years..
… any little hint of corruption…kick them to the curb..
Leodean Worrell turned a lot of people off with her nastiness toward grown men at that BWA meeting, I bet they were upper management she was disrespecting and shreeking at as though they were little boys cleaning her filthy yard…, and BLP are not even 6 months in yet, ya should hear what people are saying about Dale Marshall and George Payne….then there is this Cow fiasco where ya know some kinda tiefing and briebtaking is involved using money from the loan the government took in the people’s name…but time is longer than twine…
The people went with the lesser of the two evils between DBLP on May 24th…it is now time to get rid of the LESSER BLP….permanently out of the parliament.
The blogmaster invites you to join the discussion.