Buckle Up – Central Bank Economic Review About the Numbers

The keynote of Governor of the Central Bank Cleviston Haynes’ latest review of the performance of the economy was about growth for 5 consecutive quarters. The blogmaster is happy we are seeing an uptick in economic performance. Who does not want to see growth EXCEPT the ignorant and those rabid political partisans. Oftentimes we forget an economy is about how people in a country efficiently utilize resources with a goal of supporting a reasonable standard of living. 

However, five consecutive months of growth in the local economy, if one considers that in 2019 the global economy was significantly impacted by the pandemic should not be waved as a pretext that it will be business as usual. It is known by all and sundry our economy has a structural problem. The blogmaster recalls Dr. Frank Alleyne in 2008 – at the time serving as financial adviser to late Prime Minister David Thompson’s adminsitration- making the point there was an urgent need to address a tired economic model inherited from Barrow. It is 15 years later and the conclusion any fair minded commentator can make is that there has been negligible change to the structure of the local economy. We continue to be over reliant on tourism. It is understandable given the natural beauty of the Caribbean people will want to visit for a price BUT too far east is west.

Of mighty concern is the average Barbadian seems blissfully unaware the challenge the island is currently facing because we are a price taker in a global economy that is seeing a spike in inflation for commodity and services. It is fashionable of recent to blame the disruption to global supplies because of COVID-19 and Ukrainian Russian conflict or a slow down in the US economy which is forecast to enter a recession soon with the Fed intervening for a second time to raise interest rates. The performance of the US economy is important for Barbadians to take note given the parity of the Barbados dollar to the US dollar. Through it all too many Bajans continue to expect a broke government to be able to fund conspicuous consumption habits, giving credence to the adage – a people with champagne taste and mauby pockets.

Where do we go from here?

To a simple way of thinking, we have a people comfortably living a lifestyle that is unsustainable and has to be continually supported by debt financing. We have also the situation of successive governments, in order to maintain popularity, fueling the addiction of citizens to conspicuous consumption by borrowing. And thirdly Barbados is plugged into a capitalist system which will drag us along with it IF…We are truly in a pickle. A situation which older folk describes as one not being able to tell the other comeback. 

Your guess is as good as this lowly blogmaster where we are headed. We may agree that if we continue to buyin to the notion that our borrowing is within our capacity to repay without factoring the inherent risks of a small developing state, we should sit back, buckle up and enjoy the ride to the Economic Cliff.

Central Bank of Barbados Governor Cleviston Haynes delivered the Bank’s review of Barbados’ economic performance in the first half of 2022 and took questions from the media and online audience.

328 comments

  • @John
    Can you confirm or not if one can simply use a well on their land without bothering about the BWA? I always assumed this was the case but am not 100%.

    Like

  • I was reliably informed that the Mannings have a history of engaging in what can only be described as, ‘stealing from themselves.’

    The Directors created several different companies through which they provide services for the main Group of Companies.
    For example, Wayne Manning was being paid a salary as the Companies’ CEO, but had different companies that were subcontracted to provide architectural and construction services respectively.
    They also owned equipment, trucks etc, which they rented to the main Companies.
    Trucks registered to Black Bess Farms, for example, were rented to Black Bess Quarry.
    Obviously, repairs, maintenance, wages to drivers and equipment operators would be charged to that company.

    And, they’re surprised the Companies have been ‘losing money 💰.’

    Like

  • AC

    I have seen family member and workmates the had flu like symptoms shortly after taking the flu shot

    I have workmates that are vaccinated and still got covid and the symptoms weren’t much different from the flu or from the flulike symptom of this in my first paragraph

    The one the was boosted just had a cough and said she was ok in three days

    As for the rest. Covid is relative new compared to the flu and is not the flu virus so I do not expect it or it’s symptoms to be exactly be like the flu
    However I do expect that some day coming sooner than u expect that the need to isolate will be dropped. It will be just like for the flu – if u get covid u stay at home for a few day. The testing for covid may even be dropped unless u seek medical attention

    We are moving forward if u want to stay bunkered down until u pass away then that’s your choice

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  • John 2
    This concern about people taking all the Covid shots and getting sick is not limited to few but many people world wide
    In fact the concerns has gotten serious attention especially to those deaths related
    If you want to pretend that the Covid even with the long term negative effects then you can
    But reality is what is being said about the after effects of the Covid also the numerous vaccines given unprecedented or unheard of associated to any other virus
    Right now with all the vaccines given to Biden he has been given some other form of antiviral treatment
    Yet u say that Covid is like the seasonal flu
    I also know of people suffering from the after effects of Covid

    Like

  • August 1, 2022 7:10 PM

    @John
    Can you confirm or not if one can simply use a well on their land without bothering about the BWA? I always assumed this was the case but am not 100%.

    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    If there is a pump in it already it means sometime in the past permission was probably sought from BWA.

    Check with them.

    If you want to put a pump in it pretty sure you will need permission from BWA.

    What you will in effect be doing is extracting water from a catchment area which has an accepted yield and your request may cause a problem for other permitted users, one of which may be the BWA itself.

    Now if the water is on the surface in a stream, it’s yours to use, riparian rights.

    Check the act that establishes the BWA or call them in the morning.

    Like

  • I never said covid is like the seasonal flu
    I said mia got her shots so if she catch the virus it would be like if she caught the flu.
    The key her is that Mia got her shots she probably got her second booster recently that why she feel comfortable partying

    Do u know why Biden is getting other form of treatment and all my workmates had to do was stay at home for a few days ( one was at work for a few day before she got tested).? It because of his age / health / and he is leader of the free world

    How many people are dying from covid now as compared before the vaccines?
    Do u remember the days when New York morgues and hospitals were full??
    Compare those pre vaccines days to today and you will see the difference

    Beside the vaccines the virus has also evolved and although it more infectious today it is not as deadly as the previous strains

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  • John

    Now if the water is on the surface in a stream, it’s yours to use, riparian rights.

    Xxxxxxxxxxxxxxxxxxxxxxxxxxx

    I don’t think that 100% correct

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  • Common Law John2 unless you are saying in Barbados Common Law is uncommon.

    https://en.wikipedia.org/wiki/Riparian_water_rights

    Like

  • NorthernObserver

    @John2
    That is the rule in most places, Surface water is controlled by the land owner, water >14ft (varies) below the surface is deemed groundwater and is the property of the state.
    Then you get the anomalies, where they have large irrigation channels, but without an obvious surface water feed. And up from the ground came a bubbling stream 😂

    Like

  • ArtaxAugust 1, 2022 7:05 PM

    ‘Fast forward’ to the sale of Black Bess Quarry and its subsidiary companies, to JADA Construction.
    On January 7, 2020 employees of the Black Bess Group of Companies, which included Black Bess Farms Ltd. and M.R. Administrative Services Ltd., received a memo signed by Chief Executive Officer, Charles .H. Wayne Manning entitled, “Notification of Company Insolvency,” in which they were informed of the company’s decision to file for bankruptcy.
    Manning explained the decision was based on the Company’s failure to turn a profit last year, (2019), after a number of years of continuously “losing money.”

    ++++++++++++++++++++++++++++++++++++++++

    I did not know of the insolvency but have been predicting such things in black and white on this blog for a while.

    Lemme repeat.

    Construction is a dead end activity in Barbados because all of the available water in Barbados has been allocated.

    It makes no sense building anything that requires a dependable water supply.

    That includes “The Hyatt” and and any other exotic construction project that might be undertaken … like Sam Lords!!

    Anyone taken a look up there?

    My bet is that JADA Construction may soon follow and if the Company finds itself in a similar situation operating at a loss, it will find itself in a situation where it can’t pay severance and still has to declare insolvency.

    Better do it quickly so it can pay severance while it can.

    Alternatively, reach some agreement with its workers and convert their full time employees to contract employees on a year to year basis and reduce its severance liability.

    … now if the cost of desal comes down or it’s cost can be justified, then maybe there will be an open window.

    Like

  • JohnAugust 1, 2022 8:36 PM

    August 1, 2022 7:10 PM

    @John
    Can you confirm or not if one can simply use a well on their land without bothering about the BWA? I always assumed this was the case but am not 100%.

    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    … and if you are planning on putting a pump into it, remember there are over 700 wells in Barbados most of which are dry.

    Check Senn Report from 1946 and you will see which ones were not operating.

    Because you have a well on your property does not mean you have water!!!

    Like

  • Anyone know how many locals or local businesses got work or are getting work at Sam Lords?

    Like

  • …. and if these large projects are for Chinese then what would any sane individual expect other than local constructions companies will wither and die?

    Like

  • Can you guess where Sam Lords construction site is on this Google Earth image?

    It is visible from space!!

    Here is a clue.

    Like

  • NO

    I was hoping John would come across the info
    U may have access to the water because it passing through ur land. If the day come that BWA need to use that water for distribution then …….. the land is urs but the (fresh) water is the BWAs . Just at this time bwa don’t need the use of surface water

    Also in most places with surface water sources if the water is passin over ur land the people down stream of you have the same right to that water as u do. You just can’t cut them off or redirect the water as you please

    @ john

    Sandy lañe had their own sewage plant. I suspect the may also reuse some of the water to assist landscaping . Suspect !

    Like

  • CdC recommends wearing mask for following
    The US Centers for Disease Control and Prevention on
    Level.3 recommendations
    The designation applies to places that have had more than 100 cases per 100,000 residents in the past 28 days.

    Like

  • Damn right! I have a well in my yard. Been dry as a bone for decades. Was used in my grandmother’s day.

    Interesting water discussion.

    Like

  • John2August 2, 2022 8:39 AM

    @ john

    Sandy lañe had their own sewage plant. I suspect the may also reuse some of the water to assist landscaping . Suspect !

    ++++++++++++++++++++++++++++++++++++++++

    Also their own desal plant (1.3 million gallons per day) since 2001 because the volume of water available for pumping in their catchment is not enough so they will cause salt water intrusion into the aquifer under them and need to polish the water they extract.

    That’s the problem with all the wells on the west coast.

    During dry season they have to be shut down.

    During dry season there is not enough flow to keep the salinity of the extracted water below acceptable levels.

    https://www.desalination.com/articles/desalco-start-swro-plant-sandy-lane

    Like

  • For those who want to go by the numbers these two spreadsheets from the 1978 Water Resources Study say it all.

    Here are the design yields the BWA used in determining the volume of water that can be pumped from their various wells in each catchment.

    The Catchment areas are in Column 1 with their various supply wells and match the map starting in the North with Alleynedale.

    Some catchment areas are unused, eg Christ Church, too polluted and densely populated plus little rain compared with the higher elevations.

    And here are the projections in demand up to 2000.

    You will see that by the mid nineties demand was expected in 1978 to be pretty close to supply, exactly as the Economic and Social Report shows in Appendix 28. The volume pumped flat lined from the mid 1990’s and is no longer shown in reports atleast from 2012 onwards.

    Like

  • DonnAugust 2, 2022 9:28 AM

    Damn right! I have a well in my yard. Been dry as a bone for decades. Was used in my grandmother’s day.

    Interesting water discussion.

    +++++++++++++++++++++++++++++++++++++++++++++

    Those who live close to the coast in the sheet water area will have water in their wells but it will be useless for human consumption as there will be plenty development all around and the water will be unsafe.

    The further inland the well is the deeper it will be but it will have water in it once it is in the sheet water area.

    The St. George Valley is almost completely in the Sheet Water Area so a well here would produce water.

    Once out of the sheet water area the only way there will be water is if the well pierces an underground stream, eg Bowmanston and Sweet Vale.

    The map showing the Catchment Area has the boundaries for the Sheet Water Area marked with a dashed line, see below.

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  • The question now is from where will Sam Lord’s get its water?

    From the google earth photo, it seems to be some sort of a mega hotel which will have a mega consumption of water …. assuming that it will be a hotel and the tourists come and fill it.

    Looks at the moment as though it will be another Chinese ghost city.

    Like

  • Wood: Place growth in context
    Economist Anthony Wood is warning Barbadians to temper their excitement about the news that the economy grew during the first half of this year as revealed by the Central Bank.
    “The recent revelation by the Central Bank Governor Cleviston Haynes that the Barbados economy grew by 10.5 per cent during the first six months of the year is fodder for the Mottley administration and its supporters,” he said.
    Wood, who was a minister in the Barbados Labour Party administration between 1994 and 2008, but resigned from the party two years ago, said the governor’s revelation should be placed in proper context as there was a pressing need to stimulate higher levels of sustained activity in all sectors, rather than continue to rely heavily on tourism.
    “The warning signs are there and those who choose not to take heed will
    do so at the economy’s peril,” he said.
    The former Member of Parliament for St Philip South added it was common knowledge that the economy declined by almost 20 per cent during the coronavirus pandemic.
    “Domestic economic output in nominal value declined from $10.5 billion in March 2020 to around $8.5 billion at the end of December last year. At the height of the pandemic the tourism industry and related businesses were decimated.
    “It was therefore expected that once the restrictions on travel imposed for the coronavirus were lifted, the country would benefit from the pentup demand for travel by tourists from Barbados’ source markets. Thus, the resuscitation of the tourism sector and related businesses during the first six months of the year was expected. The strong tourism performance which accounted in a disproportionate way for the overall 10.5 per cent growth in national output, was helped by
    the hosting of cricket matches against England. These games attracted thousands of English visitors and cricket enthusiasts from other countries,” he said.
    He explained that when the structure of the growth experienced in the first six months was examined closely, there will be cause for concern since the performance of the other productive sectors had been unimpressive. He also reasoned that when the “anticipated precipitous decline” in tourism for the summer is added to the “sub-par performance of the other engines of growth”, a meagre growth performance for the economy in the third quarter can be expected.
    He said while the strong performance of the economy, fuelled by tourism, was welcomed, the gross domestic output is about $9.4 billion in nominal terms, still way below the $10.5 billion achieved in early 2020. ( AC)

    Source: Nation

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  • Central Bank did not buy BOSS bonds
    Two recent articles in the press raised the issue of the Central Bank of Barbados printing of money.
    However, both are incorrect on a number of critical points.
    1) One article claimed that the Central Bank of Barbados purchased $120 million of the BOSS bonds. This is incorrect. The Central Bank did not purchase any of the BOSS bonds which were issued over the period July 2020 to December 2021. All of those bonds issued were taken up by public servants, private individuals and financial institutions. BOSS-Plus is slated to be issued on August 25, 2022, and so has not been issued as yet, and therefore the Central Bank could not have taken up something that has not been issued as yet.
    2) The $120 million was used to purchase part of the Pandemic Bonds but this is not “printing money”. This is because it was Government’s monies that the Central Bank was holding for the exact purpose of purchasing those bonds. How is this so? The International Monetary Fund (IMF) took a decision in August 2021 to provide a general allocation of its SDRs (the currency of the IMF) equivalent to US$650 billion as a critical lifeline to the global economy during the pandemic period for countries to address the impact of the crisis. Of that increase in SDR allocation, Barbados received $261.6 million (this is not a loan from the IMF and does not need to be repaid) to be used to support its spending on COVID recovery.
    Opportunity
    So that money came into Barbados and was lodged at the Central Bank. However, given the Central Bank of Barbados Act,
    the only way to transfer those funds to the Government was through Government issuing a bond and the Central Bank using those inflows to purchase the bond. The Government also thought it prudent to let the general public have the opportunity to participate in any such bond as its purpose was to assist with the COVID recovery.
    And so, the Government issued the Pandemic Bond for $250 million and the Central Bank used $120 million of the $261.6 million inflows belonging to Government to purchase some of the bond.
    The private sector purchased the remainder. Therefore, this is not new money and certainly no printing of money occurred – as the inflows came in first. In fact, the Central Bank still has $141.6 million of the $261.6 million remaining from what came in.
    3) One of the articles warned against excessive printing of money and, in this regard, it should be noted that funds which the Government received from the Central Bank via the “Ways & Means” account (which one can consider as printing money) were not only within the limit specified in the Central Bank Act, but more importantly, the Government, immediately upon taking office in 2018, reduced that limit from ten per cent to 7.5 per
    cent. Government also placed a cap on the Central Bank’s ability to finance Government via purchasing securities on the primary market – previously there was no cap.
    This action was solely to ensure that the past was not repeated whereby between April 1, 2008 and March 31, 2018, Central Bank indebtedness to the Government went from $91.2 million ($90.6 on the Ways & Means and $0.6 million in bonds) to $2.23 billion ($289.5 million on the Ways & Means and $1.94 billion in bonds), and precipitated the debt restructuring which then resulted in the $1.6 billion hole in the Central Bank’s balance sheet.

    – Dr Kevin Greenidge, Government’s Senior Economic Advisor


    Source: Nation

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  • What Barbados needs is an economy that is productive and sustainable
    Instead of borrowing begging printing money and relying on hand outs
    Instead of building debt
    The word self empowerment should be the building block on which govt ought to use as a measurement to have good and sustainable policies

    Like

  • What Barbados needs is an economy that is productive and sustainable
    Instead of borrowing begging printing money and relying on hand outs
    Instead of building debt
    ~~~~~~~~~~~~~~~~~~~~~~~
    This is the most sensible thing that you have ever said on this blog.
    The pity is that you only realized this since 2018, else you could have advise Stinkliar and the Froon…

    Unfortunately, it also shows why we are doomed.
    Name five people who have shown the capability to create a ‘productive and sustainable economy’ in Barbados, and who can be TRUSTED to do so to the benefit of all.

    Like

  • Reforms needed
    EXPERTS SAY BARBADOS ECONOMY MUST ADAPT, NOT REACT TO SHOCK OF UK INTEREST MOVE
    By Marlon Madden
    Barbados and other regional economies are being warned to brace for spillover effects from the hike in interest rates by the Bank of England, and to focus on putting reforms in place to spur productivity, employment and economic growth.
    Reacting to the news late Thursday evening that the UK’s central bank would hike the interest rate to 1.75 per cent along with predictions of a recession ahead in that economy, leading economists Dr Justin Ram and Marla Dukharan told Barbados TODAY they were not surprised by the move, which would have a far-reaching effect.
    In a bid to tame soaring inflation rates which have been fueled by a surge in energy prices due to the Russia- Ukraine conflict, the Bank of England’s Monetary Policy Committee voted almost unanimously on Thursday for a half percentage point hike in its key interest rate to 1.75 per cent.
    However, Dr Ram cautioned that Barbados and other regional economies should take note, and start making their economies more adaptable rather than react to the external shock.
    He said focusing only on short-term measures to deal with the current inflation crisis was not good enough, given that many of the countries in the region have many of the vulnerabilities already in their economic systems before this high period of inflation.
    “What the Bank of England has done by raising interest rates, will have a negative impact on their economy and will likely have a negative impact on our economies as well. But it is time for us to stop reacting to shock. It is time for us to start making our economies more flexible and to put in place the type of necessary supply side reforms that spur productivity, growth, jobs and economic growth.
    “That is what we need now. We need to spur resilient building from the bottom up, and let us seek to have private sectorled growth and to build resilience from the business and household going all the way up to government levels,” he explained.
    Indicating that central banks were responding to a very difficult situation, he believed their reaction was “far too late” and perhaps were also complicit in the environment of very high levels of inflation.
    “What we must always remember is that everywhere and in every instance, inflation is a monetary phenomenon. If you have too much money in a system you will eventually get high levels of inflation, and when I say that, if you have excess money in the system chasing too few goods, you will get high levels of inflation,” he explained.
    Pointing out that many economists have issued warnings about the very current situation even before the pandemic, Dr Ram said “It is no surprise to me that we have very high levels of inflation now because of this. What is surprising to me is that central banks have not reacted sooner to try to head-off this inflation before we get to this point”.
    Dr Ram insisted that fighting inflation required significant economic reforms to spur productivity, and by extension, economic growth.
    “I think we need to have policies that are likely to lead to an increase in overall productivity, and an increase in production thereby providing this countervailing force to this over and excessive supply of money we have in the system,” he said.
    “This not only applies to countries like the United Kingdom, but as you know, in the Caribbean we have been experiencing many periods of low economic growth and simply because we have failed to implement the types of supply side reforms that are required to spur productivity, to spur investment, and therefore to spur economic activity, growth and jobs, and this I think is the way that we need to start focusing on,” said Dr Ram.
    Inflation in the UK was estimated at a high of 9.4 per cent at the end of June and could rise to over 13 per cent by October.
    In the case of Barbados, the 12-month moving average increased to 5.8 per cent at the end of June this year, compared to the 1.5 per cent the same period last year.
    According to the Central Bank of Barbados, the major drivers of domestic inflation have been food, with significant increases in meat, bread and cereals, oils and fats, dairy and fish.
    “High energy prices have also affected transportation and electricity costs and the costs of inputs in the construction sector have also risen sharply,” the recent central bank report indicated.
    While governments in the developed economies have been raising interest rates to dampen demand, the Mia Mottley administration has employed a temporary indirect tax reduction method by putting a cap on the Value Added Tax (VAT) on electricity and adding items to the VATfree basket.
    Dukharan, who in June of this year warned that Barbados could expect a dampening of economic activity due to rising food and energy prices and further fall off in visitor arrivals form the UK due to rising inflation in that market, today said raising interest rates was unlikely to have any impact on the rising inflation.
    She argued that the inflation being seen was supply driven, based on higher prices of production, particularly oil and gas, as opposed to demand.
    “So raising interest rates which the advanced economies are doing apace, but which we are not necessarily doing in the Caribbean except for Jamaica and the Dominican Republic, really does not affect that kind of inflation, because raising interest rates does not change the price of the product on the shelf and the import as the case may be,” she explained.
    Dukharan said production prices were simply going up because of higher commodity prices, which was compounded by rising shipping costs.
    She further explained that by raising interest rates it “makes the costs of borrowing higher, the cost of living higher and it dampens demands”.
    “In dampening demand it means GDP, the size of your economy will slowdown or contract as the case may be,” she said.
    “I am not surprised to see this action from the UK, but I am confused as to why the central banks think this is going to help their inflation, it is not,” said Dukharan.
    “What it means for us however, is that central banks are having to overreact now and so they are raising interest rates very very quickly to try to head off these very large price increases that we are currently seeing. I am not certain it is going to work, but what it could certainly mean is that it could provide a jolt to these economies, meaning that many of these developed countries can be pushed into recession as their GDPs contract as business and household confidence falls “It is a pity that we have got here.
    It means that we have not managed the economic situation diligently and what we are seeing now is that central banks are having to overreact. marlonmadden@barbadostoday.bb

    Like

  • Things said before and things said afterwards begs for the asking whose truth is it

    I found this post in another section of this medium and thought it worthy of repost. I do not hold the rights to the contents found therein.

    “Prime Minister Mottley says that the BOSS bonds were purchased by ordinary public servants and other people who bought them from public servants. Dr. Kevin Greenidge said the bonds were purchased by public servants and financial institutions. Both of them said the Central Bank did not purchase any of the bonds. The Governor of the Central Bank, Mr. Cleviston Haynes, said that the BOSS bonds were undersubscribed by the public servants they were issued for. Who is telling the truth? Your guess is as good as mine. The actual breakdown of the category of investors in the BOSS bonds at the primary issue stage should be presented to the Barbadian public. This evidence will determine who is telling the truth”.

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  • No need to fear, says Greenidge
    By Colville Mounsey colvillemounsey@nationnews.com

    Government’s Senior Economic Advisor Dr Kevin Greenidge says there is no need for Barbadians to lose sleep over possible spinoff effects by the recent decision by the Bank of England to raise interest rates to 1.75 per cent.
    In fact, he said the move, geared at dampening demand and thereby reducing inflation, could greatly assist Barbados in bringing its rising import bill under control.
    Greenidge was responding to suggestions by some economic pundits that the move could trigger a recession in one of Barbados’ major investment and tourism source markets.
    He told the Sunday Sun that given Barbados does not have the purchasing power to influence prices, attempts by larger trading blocs such as the United Kingdom (UK), Europe and the United States to stem global inflation, would redound to the island’s benefit.
    “This could absolutely go a long way in helping us bring down our import bill. The reason why the import bill has gotten higher is because even though the volumes imported are roughly the same, we are paying more, and using more foreign reserves.
    “So, to the extent that the UK and the US can reel back in the high prices, then we will see savings on our import bill because the inflation in other countries is falling. So in my professional opinion, I believe that there is all to think about in terms of positive things and I don’t see much of a downside,” said Greenidge.
    However, pro vicechancellor of the Board for Undergraduate Studies at the University of the West Indies, Professor Justin Robinson, did not
    share that optimism.
    “There is the risk that as the rates are increased and borrowing cost go up for UK consumers, it can affect tourist arrivals and more importantly, it could affect their spend. On the investment side, one must realise that Barbados does get a fair bit of UK investment, especially in terms of villas and that type of stuff. As borrowing cost go up, it may impact some investment decisions.
    “Any stress to our major trading partners, especially the UK, is going to pose a risk to our economy. The same thing applies to the United States where we see the Federal Reserve is aggressively increasing interest rates, which again increases the risk of recession,” added Robinson.
    Greenidge said if the equation was switched “and those bigger countries start to push up interest rates to the point that they hurt their own economies, then we have a problem”.
    He added: “We must bear in mind that slowing growth is not hurting economies. A slower pace of expansion is not a recession. However, if they push it too far, then they can induce a recession and at that point in time the Barbados Government will then have to determine how they would react, but for now that is not what is happening.”
    Last month, the Central Bank reported that Barbados’ halfyear foreign exchange earnings from tourism rebounded to $813 million, but this recovery was counteracted by an “historic” $2.05 billion spent on imports in the same period.
    Greenidge pointed out he was not worried about spillover impact to Barbados’ tourism product, noting that the country’s visitor demographic was not likely to feel the pinch.
    “The type of tourists we go after would not be impacted significantly by rising interest rates. We go for the high-end tourists where you get a bigger bang for your buck. We don’t necessarily market in terms of mass tourism but rather we promote mainly to those with higher contribution
    in terms of their spend. You would have to get a recession in those countries for it have a serious impact and none of the major international institutions are predicting recession. The International Monetary Fund in its most recent outlook suggested that there would only be a slowing down of growth in the US, UK and Canada,” he said.


    Source: Nation

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