Central Bank Review of the Economy – Growth Forecast

Governor Cleviston Haynes delivers the Central Bank of Barbados’ review of Barbados’ economic performance in 2019 and takes questions from the media and the live online audience.

Central Bank of Barbados’ Review of the Barbados Economy in 2019.pdf (4.16 MB)

364 comments

  • @Northern Observer

    If you heard Minister Straughn in discussion with David Ellis on todays discussion program, one was not encouraged at all about confidence returning soon to the Barbados economy. After 10 years of the DLP now we have more austerity to look forward to. Even Straughn appeared demotivated by the bureaucracy and sloth of the public service.

    Like

  • @Blogmaster
    let us now put that decade behind us.
    They were elected to perform a function. It is by performing that function, that confidence will return, IF DONE PROPERLY.

    Liked by 1 person

  • @Northern Observer

    The new government promised but not there is an enormous job to be done. The promises never equates to what is required to be done. After two years of haircuts and other initiatives there is not sufficient confidence to float the ship BB Economy. We are reaching a tipping point.

    Like

  • @ Northern

    Truth is 2 years in and I have seen little change in how government does business. We talk about confidence but many of our state entities are years behind on their audits. Even the NIS which is advertised as the people’s life line has not filed audited returns for years, yet the board stays there and the minister responsible says nothing to us.

    I wonder if the ministers understand that their inability to address these issues does little to promote confidence in the island. The time for talk and grandstanding is long over.

    Liked by 1 person

  • @John A

    You have struck the nail on the proverbial head. The elected politicians seem powerless to effect change. The public service operate with out dated systems and procedures, it will probably take a catastrophic event to force the required change.

    Like

  • Vincent Codrington

    @ David BU

    Has it not yet occurred to you that haircuts were not the appropriate remedy.?

    Like

  • “The elected politicians seem powerless to effect change”
    This is a very dangerous proclamation. They are not powerless? They may not view the changes required or recommended to be politically, or economically expedient moves, but they have the power to make necessary changes.

    Liked by 1 person

  • @WS
    It becomes painful when they rush out with fancy sounding explanations for ‘skulduggery’.

    Fortunately/unfortunately only a privilege few qualify for such explanations

    Like

  • @Northern Observer and Vincent

    A better description- will power.

    If not haircuts what? Sinckler and Worrell tried a ting, didn’t work out.

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  • I warned that we will be saying that the country has recovered while we are singing the funeral march. We learned absolutely nothing from the last forty two years in Jamaica and the IMF.
    Now we about to beg Guyana after kicking the Guyanese in their whatever.
    There is a vast difference between optimism and gullibility.

    Brasstacks continues to be the only hope for the dispossessed.

    The Duopoly Rules

    Like

  • fortyacresandamule

    Economic forecasting makes astrology look respectable. The field of economics is good at after-the-fact analysis, but terrible at prediction. It is for this reason why I pay little attention to macroeconomic projections from economic forecasters. And it doesn’t matter if those forecastings are coming from the IMF, WB, central banks, private tink-tanks, consultancies, academia, consensus surveying etc. They all do a poor job at this exercise.

    Just to come up with a country GDP figure alone is more like a combination of alchemy and magic. Go figure.

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  • Vincent Codrington

    @ Forty aches

    That is true in ALL disciplines, is that not so?

    Like

  • fortyacresandamule

    @Vincent. No boss. Don’t take it personally. The STEM fields have little room for error. In Engineering, for example, it can mean the difference between life and death. Economists can be wrong everytime without no consequences. The irony in all of this, is that, despite their unproven theories and crappy models, Economists on average, are still able to command higher salaries than those in the more respectable STEM fields. Go figure.

    Like

  • 40acres

    You are right about economists. It is a modern form of voodoo. How many saw the 2007/8 crisis coming? How many lost their jobs because of exaggerated growth predictions before the crisis? What about the dot com crisis at the turn of the century? How many got demoted because of bad forecasts? Why do we (or at least our media do) still take economists seriously who go around talking about growth?
    A PhD and a title is all it takes to go around preaching like a snake oil salesman. For a good read just have a look at Paul Krugman’s essay in the New York Times magazine in Sept 2009, “How Did Economists Get It So Wrong”.

    Like

  • However last week you wondered why the local press had not asked retired local economist Professor Michael Howard to submit articles. May your mind up!

    Liked by 1 person

  • This is a very important statement by the Minister.

    “Minister in the Ministry of Finance Ryan Straughn is confident that households and businesses should start getting more wiggle room in another two years so they can start spending more again.”

    Note:” another two years” ……”

    https://barbadostoday.bb/2020/02/04/two-years-to-ease/

    This suggest to me that the Barbados economy is in serious trouble. Let us hope the MAJOR projects start really soon.

    https://www.nationnews.com/nationnews/news/243751/straughn-projects-key

    As a Bajan born owner of property in Barbados I am exercising right to comment even though I live in Canada.

    Liked by 1 person

  • @ Hants

    You left out the part where he added assuming certain projects get off the ground soon.

    This really deserves exploring on its own as it is basically an admission of BERTS failure to provide growth.

    Liked by 2 people

  • ‘This suggest to me that the Barbados economy is in serious trouble’…..at what recent time did you think this was NOT the case?

    Liked by 1 person

  • Missing In Action ? lol

    “GEORGETOWN, Guyana – Guyana bestowed the Order of Roraima on Barbados Prime Minister Mia Mottley in recognition of her outstanding service to the Caribbean Community.

    “Citizens of foreign nations who are deemed eligible may be appointed as honorary members of the order.”

    Hope she beg fuh some a dat guynese oil dollars.

    Like

  • @ NorthernObserver,

    When MIA said ” we got this “. lol

    Like

  • @ Hants February 4, 2020 2:47 PM
    “Hope she beg fuh some a dat guynese oil dollars.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++

    Does big brother Guyana still owe poor little sister Bim (who no longer punches above her weight) a lot of money (in today’s dollars) by way of the now defunct Caricom Multilateral Clearing Facility (CMCF)?

    If so, then it’s time for Barbados to call in the ‘long-outstanding overdraft’ and for Guyana to ‘woman up’ and pay up now that it has found its bonanza of black gold.

    Barbados is badly in need of every little bit of forex to support its currency peg which will soon become loose if the tourism boom fails to materialize this year.

    Guyana can either send some the US $ from the sale of crude to the foreign-owned refineries or by assigning (on FoC basis) specified crude / gas shipments for Barbados to help reduce the forex outflows by the net market value of the crude.

    It would be nicely informative to hear our resident chief economist “V. C” (Ret.) on this one.

    Like

  • @Hants

    You should read this report.

    https://barbadosunderground.files.wordpress.com/2020/02/global_witness_-guyana_exxon_report-_feb_2020.pdf

    Liked by 1 person

  • @ David

    I listened to Straughn’s comments on Brass Tacks and read what he said in the paper and have to say I am very concerned. I wonder how many listened to it and heard what was said and what was not mentioned.

    Basically he has admitted BERT has not produced any growth and has hinted that more taxation will have to come to meet the shortfalls. Of course over a year ago some of us here said BERT would produce no growth and we get called DLPites and negative and all kind of other things. We really need to discuss this on a separate thread as it’s critical for all to understand our reality as of 2020.

    Question is now where from here and if we have 2 more years of this, does that not directly conflict with the Central Banks Report for the highest growth this year for the past 10 years?

    I real confuse here somebody help me nuh!

    Liked by 2 people

  • @ John A
    Surprised that you’re surprised. Obviously you have not studied how the Duopoly operates. They have built the country on a lot of false hope. How can we correct an economy by implementing the identical policies that made it fail for the last thirty plus years. Remember this is our third trip to the IMF. Whom are they trying to fool? The Duopoly should be placed in a barrel of tar and pushed into the careenage.
    Now we are back to Animal Farm: Produce Produce. Now we are hearing about some minister is frustrated by the “ sloth” in the public service. Here we go again blame somebody else.
    Just listen and tell me what was the finance man on VOB saying that we have not heard for the last ten years .
    Don’t forget Sam Lords was fifteen hundred jobs. None delivered. Then there was the big project in St Lucy. Nothing happened. Then Sandals west coast project. Nothing. Hyatt. Nothing yet. Same old crap.
    Next stop :airport workers on breadline. You think the Duopoly sweet.
    The Duopoly Rules

    Liked by 1 person

  • @JohnA
    sometimes hindsight is 20-20…..
    watch this and the other 30min video which follows….listen carefully to the end of the second video

    Then read the WO agreement

    Click to access 713d8df19118bb2ac5742609f9125046.pdf

    Report back. Note the date of the conference and when posted to youtube.

    Liked by 1 person

  • @ Vincent

    The 2 by Buchheit were very interesting. I Like when he spoke of a short leash being a noose!

    What I found most interesting is the multiple restructuring of carribbean debt. One has to ask is there no end then to the original debt on terms of its clearance? Also what is the interest cost of such ventures in the long run to the state? This also brings to light the whole haircut issue as well. The function of companies like WO have also drawn his concerns clearly as well. It is clips like these that we should. Be exploring here, as neither the press or the opposition intend to that is now clear.

    I got to listen to the local one still. Will get back to you there.

    Liked by 1 person

  • Vincent Codrington

    @ Miller at 4:28 PM of Feb 4

    For obvious reasons ,I beg to be allowed to recuse myself from commenting on the CMCF debacle.

    With respect to the perceived entitlement to a share in Guyana’s windfall of petrodollars, my answer is no. Do you recall the statement: “However welcome ,wait for a call” ? Please apply your favourite mantra, ” Karma is a ///%#@”

    Like

  • This document was on BU before. Plse note again it is written under the law of England and Wales. When I mention incompetence people think I am unfair. Imagine the government of Barbados entering a debt restructuring agreement written under the governing law of the finance adviser.
    This is not an oversight. I have written before of timeshare agreement written in Barbados under US law in a nation of lawyr/politicians. Barbados is a failed stat..

    Like

  • @ Vincent Codrington,

    DLP Prime Minister ? “However welcome ,wait for a call”

    BLP Prime Minister EMPLOYED Guyanese at his house.

    The case will be made that Guyanese neuvo riche with oil soaked dollars are MOST WELCOME in Barbados by this BLP government and its Prime Minister now with her Order of Roraima.

    Like

  • Vincent Codrington

    @ John A at 10 :53 AM

    The gremlin at work again.
    Please enjoy the two videos. Very enlightening. Your suspicions will be confirmed.

    Like

  • @Vincent

    The other issue for us that arises from these videos is this.

    If we keep restructuring or pushing forward the debt, will we not reach a point where 10 years down the road we are spending the bulk of our income servicing 20 year old debt, with no excess liquidity left without a massive boost of economic activity occurring to service current debt?

    I never agreed with everything Owen said but I give him full marks for when he said we have to show growth in the area of 5% yearly going forward to get out the hole we are in.

    Liked by 1 person

  • Vincent Codrington

    @ Forty acres

    Not taking it personal at all.
    Science is science . In what you described as natural science there have been room for failures and they occur every day with disastrous consequences.
    And yes there are disastrous consequences of applying inappropriate economic models.
    In both branches of science there are known unknowns and unknown unknowns.

    Like

  • @John A

    Please advise if at any period post Independence has the local economy achieved 5% growth.

    Like

  • GOVERNMENT IS ANTICIPATING the start of some major projects in the coming weeks.

    Prime Minister Mia Amor Mottley said people who were calling for investments would be able to count them “one by one”.

    https://www.nationnews.com/nationnews/news/243769/pm-projects-coming

    Liked by 1 person

  • Vincent Codrington

    @ John A

    I think we agreed to call that strategy “kicking the can further down the street”. It has the same outcome.

    @ David BU at 11 :55 AM

    What is the point you are making in the referenced intervention?

    Like

  • @ David.

    We didn’t need it pre 2008 because our growth always kept paste with inflation. For the last 10 years we have shown no growth and inflation over the period has galloped ahead in total compounded about 30%. So the bajans buying power with $100 bill ten years ago is worth $70 today

    That is why I will bet money our growth this year will not be 1.5%. In other words the average persons capital is way behind the cost of living. The 5% Owen spoke of would return growth to average inflation of 3% and put the rest to pulling down the imbalance.

    Liked by 1 person

  • Every little helps.

    ” state-of-the-art ice cream manufacturing plant and a meat processing plant at its Lears, St Michael site. He also revealed plans for a mega family entertainment centre to be constructed at the Newton, Christ Church location.”

    https://barbadostoday.bb/2020/02/05/haloute-announces-multi-million-dollar-investment/

    Like

  • Chefette is a private company. Where are these investment opportunities going to come from? And can we trust a government which has jut defaulted on its debt obligations?

    Liked by 1 person

  • Ceasars Pizza coming so we would have more processed food to choose from and a few bajans will get a job.

    That should add about 0.000002% to the growth projection as every little bit helps.

    Liked by 1 person

  • @John A and Vincent

    We should resign to accepting that an internal devaluation is helpful given our inability to grow and outpace inflation? Not many countries in the region have achieved acceptable growth. This region as you know has to carry a huge debt burden. We have some larger issues to manage.

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  • Will Caesars be a listed company?

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  • @ Hal.

    Part of the Williams group

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  • Why am I not surprised?

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  • The majority of Bajans want to live like Amurcans and Canadians.

    That is a fact.

    The only thing that could stop Bajans from lining at Little Caesars would be hurricane or major natural disaster.

    Liked by 1 person

  • @ Hal

    At least a large chunk of the Williams companies are now owned by the staff. I think in excess of 40% of the shares are in the hands of the staff. That means once the companies grow their worth will grow with it. To be fair to Bizzy he has made many of his staff into investors and some are very comfortable as a result trust me.

    Like

  • @ david

    How did 8 years of sinklers 5 or 6 reincarnations of internal devaluation work for us? What he should up done is restructure the money pits like the transport board instead. But every minister of finance is at heart a politician, hence the vote must be protected. The same money pits sinkler left 2 years into this group and they are still sucking on the nipples of state!

    Stewart was no PM but he had a way with words I give him that. Lol

    Like

  • @John A

    It didn’t work. Our economy is mainly retail and distributive trade. God knows how much foreign exchange is leaked by the tourism sector which all agree does not have the global impact on the economy. Magic can only take you so far.

    Liked by 1 person

  • John A

    Shares in a failing company do not add up to much. Workers want decent salaries, pensions, holidays and other benefits. If they want to invest then they are free to. It is a bad investment investing in your employer. It is putting all eggs in one basket. Diversify, that is the principle of investing.

    Liked by 1 person

  • @ John A @ Hal
    Ignore the supreme apologists. We are going around in circles.

    Like

  • @ William

    It’s starting to look like 6 of one and half dozen of the other I agree with you.

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  • @Johm A

    Is it true the local economy is about retail and distribution with construction the icing? Where is the growth of 5% going to come from?

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  • @ David.

    Some will come from tourism. With a serious alternative energy plan some from there and with a serious import substitution plan for food there as well.

    We have several sectors sitting idle that can show growth with a plan and some help.

    Like

  • @John A

    Have you calculated the level of growth that must come from the idle sectors to move the needle to achieve 5% growth? Do these sectors have the capacity to deliver?

    In another note have you seen that oil import cost rise year over year? Go figure.

    Like

  • @ David

    The first thing i would look at is our food import bill. The MOF needs to have the minister of agriculture go through this list line by line and identify the items and their values that can be grown here. We then need to go into a state financed greenhouse project to ensure this happens. These will then be rented to the registered growers. Import bill for food I think is $500 m or something like that.

    Then we look at the fuel import bill which i think is around $500M say and do the same. Remove the barriers on alternative energy, drop duty on electric vehicles etc.

    In other words we go through each sector we import and identify where we can gain some of this business locally.

    So what is a 5% growth in a $3 billion economy in real terms? Well that is $150M. So if we could just increase our alternative energy business so that it can replace $100M in fuel imports, while doing the same $100M in local food production, that alone would exceed the 5% you looking for.

    Do the above and plug the drains on central government and your growth will be achieved and your cash flow improved.

    It’s all about numbers not talk and lip service.

    Like

  • @John A

    If only it were so simple read a binary problem to be solved. What about the establishment with the power structures and incestuous relations?

    Like

  • @ David.

    The power company is more than welcome to participate. The growth can come from anyone. In fact it will have to come from every one.

    I just heard the PM on the 7pm news saying they have a plan to have agriculture play a larger part in our economic recovery. Hopefully she will do the same for alternative energy.

    Like

  • Highway 1 from the bottom of University Hill to the Methodist Church in Holetown, St James, and a section of Highway 7 in Christ Church, will finally be repaved.

    https://www.nationnews.com/nationnews/news/243782/highway-repaved

    Like

  • @ John A February 5, 2020 7:58 PM
    “I just heard the PM on the 7pm news saying they have a plan to have agriculture play a larger part in our economic recovery. Hopefully she will do the same for alternative energy.”
    +++++++++++++++++++++++++++++++++++++++++++++++++++

    She is also being pressured to find other sources of revenues to replace the loss resulting from the significant reduction in corporation tax rates.

    The government just cannot afford further losses as a result of alternative energy replacing imported fossil fuels which represent a major tax revenue generator along with imported processed food in cans and boxes.

    The government has a taxation cash cow grazing in green pastures whose udders are ripe for the sucking.

    With the opening of all of these fast foods outlets why not use the opportunity to extract some ‘taxation’ value from this growing sector?

    Why not impose a ‘Fat Tax’ (or its more ‘politically correct’ equivalent) on those who want to eat fast processed food at their ‘busy’ convenience?

    It can always be introduced under the guise of being concerned about the high incidence of NCDs and the need to tackle it; as it is done in the case of other sin taxes like alcohol and tobacco (and gambling).

    Like

  • @ miller

    Government has to reign in it’s spending and it’s money pits. It cannot expect to get where they want simply by economic growth.

    Ask them how has the flow of funds from the state to government entities in the form of subsidies been progressing? How are we with getting updated financials for these entities?

    If all they plan to do is pick the low hanging fruit so as not to shake the tree, then we will get no where.

    Liked by 2 people

  • @JohnA
    you are getting warmer….
    BUT…you are still thinking like a private citizen or corporation, and applying those principles to public and political dealings.
    Recall the opening line….in the 21st century, NO Sovereign borrows money with the EXPECTATION it will be repaid. Rather, at maturity, it assumes (hopes?) its debt will be re-financed.
    The politicians’ primary goal is election. No election = no power. Fiscal balance in something from fairy tales.
    P.S I know you may have seen me also harping about updated financial reports….it’s really tongue in cheek….since you have become a WS duopoly disciple, you will appreciate the sanitization required. I suspect after that last crew, it maybe, a monumental undertaking. Purveying perpetual incompetence can be challenging.

    Liked by 1 person

  • Interesting to hear Dr. Kevin Greenidge hoping for flat performance this year when juxtaposed to forecast by the Governor of the Central Bank. Again why cant they read from the same sheet.

    Liked by 1 person

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