Governor Cleviston Haynes delivers the Central Bank of Barbados’ review of Barbados’ economic performance in the first six months of 2020 and gives his outlook for the remainder of the year.
Source: Central Bank of Barbados
Central Bank of Barbados Review of the Economy: January – June 2020
244 responses to “Central Bank of Barbados Review of the Economy: January – June 2020”
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TronAugust 9, 2020 9:27 AM
Currency reserves are rising because the native masses are unemployed and therefore cannot spend any money.
So mass unemployment is the solution to our foreign exchange problem.
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But would that only cause a slowing in their fall?
What is putting back what is taken out besides borrowings?
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David BU at 6 :24 AM
Yet another member of that famous tutorial class agreeing with the clarity and objective assessment in the Central Bank’s latest quarterly report. Thanks for re-posting.
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@Vincent
Yes, have a lot of respect for the professor.
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@ David Bu at 6 :23 AM.
I agree with your captioned comment wholeheartedly. I hope that the post is not a precursor to the actual. -
@ Vincent
Why haven’t our media offered Prof Howard a regular column (weekly?) to comment on economic affairs, instead of going to ill-informed students to comment?
I disagree with his view that CoVid caused the deep recession in Q2. It added to it. Government incompetence cause the recession. It would have happened regardless of the pandemic. We became aware of CoVid in March, this government was elected in May 2018. -
@ David BU at 10 :14 AM
Yes. I do. He, OSA and Dr. Judy Whitehead were members of those two tutorial classes. They were keen students of Economics. I am proud of their achievements.
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@ Hal Austin at 10 :24 AM
Columnists tend to write to close deadlines. This has a tendency to encourage sloppy writing and arguments.The Newspapers tend towards articles that are sensational,controversial and superficial. It would be a waste of a fine mind’s time. But Dr. Howard does comment on national issues when necessary.
On the issue of COVID and the decline? You may be right. COVID ,although temporary, might have sped the process or, better still, provided the opportunity to change course. I lean towards the latter. -
@ Vincent
After having worked for approaching fifty years in journalism, including editing a number of publications and writing columns, I did not realise what you just said. Many thanks. Never too old to learn.
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@ Hal Austin at 11 :05 AM
I believe you meant “recognised”. Please note I used the word “tendency” at least three times in that intervention. I am sure there are several exceptions to a general rule. In any case the newspapers you referred to were local and you, yourself, have referred to their deficits several times on this blog. Please do not get your knickers in a twist at your age and with your experience. Lol!!
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@ Hal
Not “ tears” Comrade but laughter. These pathetic apologists are not to be taken seriously.
Imagine two parties running the country for more than sixty years straight cannot get integrity legislation on the books.
It will not end in “tears” Comrade. It’s laughter all the way around.
It’s a great read to see the apologists swimming in their own cesspool of lies and deception. And I mean from both the Bees and Dees. -
@ William
Shortly before Leroy Harewood died I went to see him and we were talking. I thought there was a bit of anger in his voice at the slow pace of developments in Barbados.
I often have to check myself because I sense the same tendency in mine. After spending nearly all my adult life working with competent, even if wrong, people. Taking a closer look at Barbados and how we are managed can be so embarrassing one tends to get furious.
What exacerbates it is when people who think they are intelligent come on BU and say the most childish, irrational nonsense. I look on the bright side and hope that CoVid goes away quite soon and I remain in relative good health. It means I will be able to get out and about and avoid nonsense. -
Dullard August 7, 2020 7:14 AM
“A 27% decline in Q2 following a positive, non zero decline can never any where near 15%. This is such an egregious error that I would be tempted to be suspicious of the CBB’s data, methodologies and peer review processes.
I would love to hear someone from CBB explain where the 15% comes from.”
TheOGazerts August 7, 2020 7:16 AM
“@Dullard
Your approach, I believe, is the correct one and is one of the ways I tackled it.
I suspect that some sort of averaging was then done.”Dullard & TheOGazerts,
I do not work at the Central Bank but, after taking a look at Table 1 of the report (Economic Indicators), I was able to understand where the 15% rate of decline came from.The table gives GDP figures in NOMINAL numbers.
To arrive at the nominal rate of GDP decline over the last year, we would use the formula:
Rate of growth = (GDP at June 30, 2020/GDP at June 30, 2019) -1So, the NOMINAL rate of growth in GDP over the last year = (4596.9/5,255.7) -1 = -12.5%
To move from a NOMINAL rate of growth, to a REAL rate of growth, we have to consider the rate of inflation.
The Central Bank implicitly says that after taking a 12-month moving average of inflation rates, it adjusted the NOMINAL 12.5% rate of GDP decline over the last year to a REAL14.9% rate of GDP decline.
Based on the foregoing, and given the GDP numbers, I see no reason to create a fuss over the real GDP rate of decline of 15% produced by the Central Bank.The real problem lies in the GDP figures themselves and what they are supposed to mean. The ridiculous assumption has been made that every dollar paid to a Barbadian worker represents a dollar of GDP. Of course, we have seen too many incidents which serve to highlight how laughable this assumption is.
A few examples should be enough to illustrate my point:
Thompson and Associates produced an invoice which claimed that legal work, worth of thousands of dollars, was done by another lawyer for CLICO. The thousands of dollars went into the GDP figures for Barbados, but the lawyer told the country that no work was ever done.
Millions of dollars found their way into our country’s GDP figures for the Four Seasons Project. I invite BU readers to take a trip to Paradise Beach and see what real GDP resulted from the millions spent.
During the COVID-19 lockdown, millions and millions of dollars were paid to private sector, government ministers and other civil servants who “did not drive a stroke”. You can bet your last dollar that those millions of dollars are included in our GDP figures.
Realistically, the decline in GDP over the last year is much, much more that 15%. Our challenge now is to find a new, practical, and pragmatic way to measure our GDP.
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@ Walter
Dont forget the $800,000 in consultancy fees that been paid out also form part of the GDP! LOL
I agree with you though how we measure it is the issue. About 3 years ago I was discussing this same point with others and told them the below.
GDP needs to be measured factoring in the following.
Vat collected
Duty collected from all entries
FX deposited over the period with the central bank net of loans for the same period under review
Take these factors and use them in a formula, as they are hard ubdisputed numbers all of which indicate economic activity in real terms.
I was going to included the unemploymwnt percentage too but i also got a problem with that, as it does not break unemployment down in real terms. In other words if you employed 2 days a week or 5 you employed. There is no measure therefore for part time employment or its effect on the economy.
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@Walter Blackman. You are on point sir.
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Government statistic agencies in the region are usually underfunded. The quality, relevancy and timeliness of macro-economic data is so-so at best. The unemployment rate should be published every month instead of quarter. Quartley GDP publication should include the expenditure and income approach also.
To get a pulse on the economy, I usually ignore the GDP aggregate, and look at certain figures, like government capital expenditure outlay, large ongoing private investment projects, and certain specific sectors of the economy. This latter data are easy to measure and verify. Examples: Water and electricity production and consumption, stay-over visitors arrival number, residential construction permits, and new loans to the private sector.
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Since GDP is down everywhere, the relevance is the actual number, which will be used in Debt to GDP calculation, the IMF’s fav metric. And can also influence the Ratings folks. The availability and cost of borrowing become the ultimate chess pieces.
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Depends on how we calculate debt to GDP. Governments continue to cook the GDP books. We know the figures given 18 months ago are now bogus, since government has incurred even more debt, including BOSS. Where is the much vaunted idea of fiscal space?
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John A August 9, 2020 3:06 PM
“@ Walter
Don’t forget the $800,000 in consultancy fees that been paid out also form part of the GDP! LOL”
John A,
I hate to say it, but this is no laughing matter.The $800,000 you mentioned is just a tiny drop in the bucket and was paid to consultants for merely helping the government to “comply with Financial Action Task Force (FATF) guidelines”. The actual figure quoted in the press was $840,000.
However, there is the much larger figure of $47 million which Bishop Atherley castigated the government for spending on consultants, and which would have caused Vincent Codrington to voice some concern and disagreement in one of his earlier comments.
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We need whole of government accounts. Put every single liability in the public domain, including pensions, bonds, rents, consultants’ fees, CBC debt, all the statutory bodies’ debt, loans from Bretton Woods organisations, the lot. Then we will get a more accurate debt to GDP ratio. Stop cooking the books.
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I find it interesting that the Barbados economy, for all its catastrophic failure, is outperforming the USA.
In the USA “Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.”
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Ptl tell that so called good news to the people who ate suffering and wait to hear the.response
Meaning barbados economy is moving of wheels oiled with borrowed money
Much of that money funnelled into testing for COVID and propping up the Tourist industry
Now this type of news you present is supposed to be a light shining at the end of a tunnel or what? -
@Mariposa
It’s not good news… it just points out what a complete incompetent idiot Trump is. -
I find it interesting that the Barbados economy, for all its catastrophic failure, is outperforming the USA.
In the USA “Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.”
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
IN THE LAST 6 WEEKS I GOT A FORGIVABLE PPP LOAN OF US$240,000 FOR MY TECHNOLOGY BUSINESS.
IN THE LAST MONTH I ALSO HELPED 8 OTHER BLACK BUSINESSES SUCCESSFULLY GAINED CUMULATIVELY OVER US$1.8 MILLION IN PPP FORGIVABLE LOANS ALL WITH DIFFERENT BUSINESS MODELS, PRODUCTS AND SERVICES.
WHAT IS BARBADOS DOING IN REAL TERMS FOR BLACK BUSINESSES DURING THIS CORONA VIRUS PANDEMIC?
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@BAJE,
I’m happy for you have prospered from Trump’s boosting of government debt… In essence you have borrowed that money from your grandchildren. If you don’t repay it because it is “forgivable” then you will be screwing your grandchildren and their children. -
@ Baje
Barbados is doing nothing but talking big a la Mugabe Mottley
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@Baje
Barbados is doing nothing to help Black business… the only assistance is going to the foreign owned Hotel sector and the White owned segment of the construction industry. -
More than 35 years ago , I heard in a lecture that the tourist industry takes out a considerable amount of the revenue it brings in. I was told that any major catastrophe will literally wipe it out. I am amazed that we continued on a policy of all eggs in one basket and now find ourselves arguing/ debating bogus figures that have been given for four decades.
And to crown it all ; we all seem to believe that we are so damn brilliant and we know so much.
The country has been mismanaged for the last five decades and I will wait until the throne speech to see if we wake up yet.
We see development and management in narrow academic terms. Results don’t really matter to us. That is why we can spend a year arguing over a percentage while the poor people in the rural areas ain’t got proper running water.
Go figure. -
@William Skinner August 9, 2020 7:28 PM
“The country has been mismanaged for the last five decades…”
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The country has been mismanaged since 1627. At their best our colonial administrations were just as incompetent and corrupt as the ones we have had since independence. Most of the time the colonial administrations were much, much more incompetent and corrupt. Let us not pretend that our problems magically started only 50 years ago. -
@Walter
It seems to me that regardless of who is in power consultancies will always be the golden goose for many. One cant help but wonder if the more things change they dont remain the same.
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I believe that we should look at 1627 to around 1966 different form 1966 to 2020.
To go back to 1627 is provide cover for 50 years of mismanagement. -
@BAJE August 9, 2020 7:12 PM “WHAT IS BARBADOS DOING IN REAL TERMS FOR BLACK BUSINESSES DURING THIS CORONA VIRUS PANDEMIC?”
We are working hard trying not to die from all the COVID19 the North Americans and Europeans are sending our way.
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@peterlawrencethompson August 9, 2020 7:36 PM “The country has been mismanaged since 1627>”
So true..
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@Hal Austin August 9, 2020 7:22 AM “Why do most black travellers prefer Virgin and whites BA? (Those whites who travel on Virgin and blacks on BA please hold your horses)”
Virgin has cheaper tickets, more police staff, and better food…but boy those seats keep you squished, good thing I was traveling with family. [this is pre Covid19, i haven’t traveled this year] .
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polite, not police
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@Hal Austin August 9 at 10:24 a.m. :We became aware of CoVid in March”
This is NOT true.
COVID19 was first identified in Wuhan, China, in December 2019. The World Health Organization declared the outbreak a Public Health Emergency of International Concern on 30 January, and a pandemic on 11 March.
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The black business are all falling left and right
Everyday across social media that is the talking point
Most of the time when i check in on BU i am mystified at the repetitive ongoing topics that has little or nothing to do with the economic realities of the bajan household and the pain and suffering
Even little of recent is being said about the ongoing crime and violence a bug that keeps eroding at the social environment of this country
Yes Mia reshuffle ewe and cry
However question being
What does that reshuffle do in helping to restructure the barbados economy
Nothing along those lines being said
At times i stepuse and wonder if white shadows are guiding the hands of BU a place which once held govt feet to the fire has now become a glaring example of digging a rabbit hole for the readers to head down -
February 23, 2020 Ontario confirms presumptive case of covid19
https://news.ontario.ca/mohltc/en/2020/02/ontario-confirms-presumptive-case-of-covid-19.html -
On February 2, 2020 I noted to a friend that “tomorrow morning China’s Central Bank will release $170 billion dollars into its economy to make up for the losses being suffered by its tourism economy because of the novel corona virus”
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COVID 19 is a challenge to the global economy, it goes without saying it will be more small open economies like Barbados. The prime minister has signaled the government plans to take fresh guard come September.
#wewait
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John A
August 9, 2020 8:27 PM
“@Walter
It seems to me that regardless of who is in power consultancies will always be the golden goose for many.”John A,
Our educational system is supposed to be the cornerstone of our national development. Given the fact that, for its size, Barbados has been endowed with a high percentage of brain power per capita, and given the fact that we have produced, and can produce, whatever professionals are required to thrust this country forward, the question must be asked: How much of the $47 million in consulting fees went to Barbadians? How much went to black Barbadians? I am asking this specific question because black Barbadian lives matter.If many foreigners are being relied upon to provide consultancy skills needed at this point in time by the government, what efforts are the government making to position Barbadians in the near future to provide these skills to the country of their birth?
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@WB
Foreigners, of any skin tone, expect to be paid in FX. Rebates on the contracts can then be paid in FX in a foreign place.
We fool ourselves if we think getting $$$ offshore is not the #1 goal of the monied group. It is the top hedge against many unpleasant possibilities. -
@ Walter Blackman
You have let the cat out the bag!
The fact is that, while neither BLP NOR DLP are “black” governments, this BLP GOVERNMENT love de white people even more dan de other set.
Observe that, even in Coronavirus times, de white shadows getting out licking while we black people starving
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What efforts is the government making……
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Government playing test cricket. Ministers spinning.
” “I have some very ambitious plans,” said Duguid, two weeks into his new ministry.”
https://barbadostoday.bb/2020/08/07/options-for-housing-coming-duguid/
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@ Piece the Prophet,
Good to see you back. -
NorthernObserver
August 9, 2020 11:01 PM“@WB
Foreigners, of any skin tone, expect to be paid in FX. Rebates on the contracts can then be paid in FX in a foreign place.
We fool ourselves if we think getting $$$ offshore is not the #1 goal of the monied group. It is the top hedge against many unpleasant possibilities.”NorthernObserver,
In a nutshell, you have stated what many of us have been whispering among ourselves for years: some people in positions of authority and trust are using their status and power to enrich themselves whilst impoverishing their country and its people. The Donville Inniss trial showed all of us the thinking, the objective, and the methodology being employed.Unfortunately, these types of iniquitous practices are driving a stake through the heart of our nation. Somewhere along the timeline, a price has to be paid. Wil that price be economic, political, or worst of all, social?
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Piece the Profit August 9, 2020 11:08 PM
“@ Walter Blackman
You have let the cat out the bag!
The fact is that, while neither BLP NOR DLP are “black” governments, this BLP GOVERNMENT love de white people even more dan de other set.Observe that, even in Coronavirus times, de white shadows getting out licking while we black people starving”
Piece the Profit ( I have no intention of encouraging you with your fraudulent claims. Prophet, my foot.)
I haven’t let any cat out of the bag. The cat was out of the bag so long that it has now grown into a tiger.
From the time Adam was a lad, the economy of Barbados was described as being small, open, and fragile. The social structure was seen by all to be built solely upon colour and class.
Systemic racism has challenged and confronted the majority black population for centuries, whilst neither the BLP nor the DLP has been around for 85 years. So when it comes to black and white in Barbados, and what we need to do as a people to bring racial equality and social justice to our landscape, please don’t start with the customary BLP/DLP foolishness.
Please start with a long and hard look at ourselves and realize how nasty-minded and envious we are towards each other. Those characteristics are exploited to the fullest by every Tom (the Indians), Dick (Syrians and Arabs), and Harry (Whites) that dwell in our midst. There seems to be no end to this nightmare in sight.
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Please start with a long and hard look at ourselves and realize how nasty-minded and envious we are towards each other. Those characteristics are exploited to the fullest by every Tom (the Indians), Dick (Syrians and Arabs), and Harry (Whites) that dwell in our midst. There seems to be no end to this nightmare in sight…(Quote)
A precise and accurate description of the cultural flaws that keep an island people fighting just to survive. A perfect description of the evil, vindictive, snake-like habits called the Barbados Condition. All that are needed now are vulgarities and obscenities.
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