Central Bank 9-month economic review confirms 4.4% growth
Governor of the Central Bank Kevin Greenidge was pleased as punch to share that the Barbados economy grew 4.4% in the period under review. The blogmaster joins others to be concerned that the main reason for the growth was as a result of our main economic sector, TOURISM. Governor where are the green-shoots to kindle optimism that our export earnings are positioned to take off?
A truly great Prime Minister would eradicate poverty in Barbados.
buh doan mine me. I is just a born Bajan living in Canada cause I can’t afford
to live in Barbados given my multiplicity of comorbidities.
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TheOGazerts
The best idea I had for a long time is to give John( 🐇/🐰) a post at the Central Bank.
Numbers appearing And disappearing by magic. Instead of one decimal place we get seven decimal places (4.3927501%) for growth. Every state department running a surplus. Mathemagic gone mad
Statwistic got the IMF in knoxs
(excuse my mangling of the word knots … The cheap poke was there and I could not leave it alone)
Did you see my new word … Mathemagic
Agree that people feel it in their pockets most and this informs their reality. However, there is a general view that Barbadians have been living above their means for many years and successive governments, like most, pander to the wants of the many.
You have a warp sense of reality. It is not about what has happened historically, it is about now, today. There has been a big shift how families and communities structure their lives in a today’s world.
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NorthernObserver
@David
Where can we find “Barbados Fiscal Framework 2023-2024 to 2025-2026”?
There is ready mention to the resolution but no posting online that one can find. The best bet is to pay a visit to the Government printery unless Artax is able to use his superior research skills to assist.
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John2
And I am saying. That has be happening from the time Adam was a lad.
Tell me any period in time where the Barbados was appreciating for the average person in Barbados?
According to ur argument it would be when we had negative inflation and when we did have negative inflation is when the Barbados economy was negative
Wages never keep up with inflation in bim
The 4 % increase in gdp help gov to pay the one time payment and 6% raise over two yrs without increasing taxes and too large a deficit
The kill increase will not cover the whole inflation but it will help
It does not matter. Use the analogy of the government having to restructure to burn debt. What was the equivalent action by consumers? This is not a binary issue.
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John2
David
I have nothing against financing especially for housing first and transportation second if u can afford it they are usually necessities for some and all may not be as fortunate as u to buy them cash.
Over and out for today
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NorthernObserver
John2
“too large a deficit”
I thought we were in surplus trajectory?
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John A
@ John2
For God sake stop confusion or attempting to red wash what is a simple thing.
IF INFLATION OUT PACES SALARY GROWTH YOU ARE POORER. IF SALARY GROWTH OUTPACES INFLATION YOU ARE RICHER.
IF YOU SPEND MORE THAN YOU EARN YOU RUN A DEFICIT. IF YOU SPEND LESS THAN YOU EARN YOU RUN A SURPLUS.
The above rules apply whether you are a shop, a country, a housewife, or a party Faithfull. Nothing anyone says can change that, be they a politican or COB governor, as they are the basic laws of economics.
NorthernObserver, go to Parliament’s website and enter the document’s name. It’s a pdf file….. 35 pages. But, that’s if the document I read, is the one you’re looking for.
I want you to provide verifiable info as to one period of time when babbados salary growth outstrip inflation y/y and y/. W/5 etc
Do that I I will apologize to the blog for confusing / attempting to red wash what suppose to be a simple thing
Im simply asking u to tell us when we have ever gotten richer instead of alway (year after year = period after period ) gotten poorer.
When u finally come to the conclusion that we are alway becoming poorer and never once became richer since the Bajan dolllar came into circulation then my question to u would be. Why all the hallaboo about inflation at this point beside to be a red herring in an attempt to water down the positives of the 4% growth?
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NorthernObserver
@David @Artax
Thanks for finding the document 👍
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TheOGazerts
Calling on a braniac
I am hearing digital, Afreximbank, buying and selling in each nation’s currency without having to convert to US but I am not hearing a word of BITT.
What became of BITT? Is it still out there?
I think I will have to start taking notes, if I am to stay here.
Can you provide verifiable proof where banks were paying less than 1% on savings, there was a lack of confidence in government securities and citizens had to take a haircut on government bonds? This is not a binary matter.
Steuspe.
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John2
Check ur archive
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John A
@ David 5.19 pm on 31st
Thanks for posting the pricelist David. Ok so for those that think inflation should not be discussed with growth, I invite them to look at the restaurant price list that was posted by David. It shows the retail prices in 1975 which existed at a popular beach bar on the south coast.
The good old days when a hamburger was 60 cents and hot dog was 45 cents. Lol
PUBLIC SECTOR WORKERS, pensioners and other individuals are among Barbadians who have regained some appetite for Government securities, five years after investors suffered major losses when $11.9 billion in local debt was restructured.
About $734 million worth of these domestic bonds have hit the market between 2020 and July, with the Central Bank ($212.4 million) and commercial banks ($145 million) the biggest buyers.
Individuals have also been investing in Government paper again, a new Central Bank analysis shows.
Of $83.8 million in Barbados Optional Savings Scheme (BOSS) bonds issued in 2020, Government employees have purchased the most – $20.7 million.
Investors
Individuals have acquired about $38.5 million of BOSS and BOSS+ bonds. Pensioners have also been investing in the Government instruments again, buying $17.6 million in BOSS bonds, treasury notes and BOSS+ bonds combined since 2020.
Other investors across the range of BOSS, BOSS+ and treasury notes include credit unions, insurance companies, other companies, pension schemes and mutual funds – $99.7 million overall.
The Central Bank said that with Government continuing to have “some financing needs that would be best financed by accessing the domestic capital market”, a new issue of Government’s 90-day treasury bills were offered in September and in that in the short to medium term, the traditional savings bonds “are anticipated to come on stream”.
Governor of the Central Bank Dr Kevin Greenidge said during his third quarter press conference last week that “after the debt restructuring, persons got a little skittish about the market and it’s really to get persons back into the idea of investing”.
“The BOSS+ bonds are a sound investment in terms of relatively short maturity of five years, an interest rate that you can’t find anywhere else, which is four and a half per cent and paying you twice a year, which means you get an income flow that you can do something with it.”
He added: “Because of the growth in the economy, persons are coming into some liquidity, some cash, and while you may want to keep some in the banking system in very liquid form, maybe three months supply or so, you want to consider BOSS+ bonds as a sound investment.”
The Central Bank analysis added: “The Barbadian financial system continues to be very liquid with around $3 billion in excess liquidity which can be mobilised into new investment opportunities, particularly projects directed towards generating economic activity.”
Revitalise market
Government’s effort to revitalise the domestic capital market started in 2020 with the original BOSS programme where $83.8 million in bonds were issued and purchased.
This was followed by the issue of treasury note 2026 ($125 million) and treasury note 2027 ($125 million), then BOSS+ 2027 ($200 million), and the recently issued BOSS+ 2028 ($200 million).
The BOSS programme, an 18-month initiative, was initially earmarked for public sector workers, but the general public was allowed to purchase the BOSS bonds on the secondary market. “At the end of September 2023, the majority holders of BOSS holders were Government employees (24.7 per cent), credit unions (22.5 per cent) and pensioners (11.9 per cent),” the Central Bank said.
The first set of BOSS+ bonds for public purchase, issued in September last year, were “ fully subscribed within ten months, as the banking sector made significant purchases, and consequently, the financial sector, including commercial banks and insurance companies, accounted for most purchases (74 per cent), while the non-financial private sector held the remainder”, the Central Bank stated.
The monetary authority has purchased the bulk ($212.4 million) of the $250 million in treasury notes offered in December 2021 and April 2022.
“The majority of the treasury notes were purchased by the Central Bank and were financed from the proceeds of the $250 million inflow from the [International Monetary Fund] Special Drawing Rights, which were allocated to Barbados to assist with the pandemic recovery,” the Central Bank explained.
“The Central Bank’s acquisition of Government securities (2.2 per cent of GDP – gross domestic product) remained within the limit of three per cent of GDP permissible under the state of emergency clause in the 2020 Central Bank of Barbados Act.”
It said the funds from the treasury notes “aided with Government’s gross financing requirement during financial year 2021/22 ($59.7 million) and financial year 2022/23 ($190.2 million), as revenues, particularly in financial year 2021/22, had not yet recovered from the impact of the pandemic”.
Source: Nation
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Artax
“Posted on behalf of John A”
@ David
According to John A, the link “shows the retail prices in 1975 which existed at a popular beach bar on the south coast.”
Perhaps you could encourage him to EXPLAIN the POINT he’s attempting to make.
However, the following excerpts were taken from a 1995 IMF working paper I read, entitled: “Barbados, recent economic developments.”
“From the mid-1960s through the 1970s Barbados experienced virtually uninterrupted growth, reflecting the rapid expansion of the tourism and manufacturing industries under the impulse of improvements in infrastructure, increased promotion of Barbados as a tourist destination, and fiscal incentives to hotels and manufacturing.”
“However, the rise of these two industries attracted resources away from agriculture, which contributed to setting agriculture on a downward path.
Also, underlying problems with competitiveness emerged in the manufacturing and tourism sectors in the course of the 1980s.
The increasingly inefficient manufacturing sector was being protected by tariff and nontariff barriers which, together with increases in taxation, raised the costs of many inputs of the tourism industry above those of Barbados’ competitors.”
It is interesting to note Barbados’ inflation rate also spiked in the early 1970s, reaching a peak of 39% in 1975.
I’ll also invite you to read a Central Bank of Barbados working paper dated July 22, 1986 and entitled:
“Inflation and the personal income tax in Barbados, 1970-81.”
“The paper examined the Barbadian income tax structure for the period 1970-81 during most of which double digit inflation prevailed. Using income tax returns for the period, it showed how inflation affected levels of taxation as the authorities made no effort to adjust the tax structure.”
Although the prices of items on the list are relatively cheap when compared with current prices, I’m sure the average Barbadian at that time, could not afford to eat at the ‘popular south coast beach bar,’ especially when one considers the average weekly wage in the 1970s.
Also, it would be reasonable to assume that establishment catered predominantly to tourists.
And we all know prices at such places are usually much more expensive than at the local village shop, even to this day.
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John A
@ Artax
What I am showing is the price of a item on a menu in 1975 compared to what it is today. So if we take say 15 different items in 1975 and compare the cost with today it will give us an idea of the rate of increase on those items over the period. What is the rate of increse over the 50 odd years compared to the rate of ones earnings for example?
I remember speaking to a manager of a floor in a leading retail operation in Bridgetown in the 70s, who told me he bought a Datsun 1600 with his Xmas Bonus. Can anyone now for example buy a toyota corolla with their Xmas bonus?
I think we focus too much on issues that the average Barbadian cant relate to. We need to try and get over to people what all these numbers mean in their wallet, hence help them to conserve.
For instance a car sale increses GDP which is a good thing, but what does it do its buyer financial position? It does not appreciate hence can not be seen as an asset that offers a return unless its a taxi etc. So after say 5 years what is the effect on GDP vs the effect on the car buyer?
My point is that everything numeric in gains does not necessarily mean a gain to the citizens.
[…] sent BU a menu which was posted on the the 4.4% growth NTSH blog – see menu. This showed what a popular beach restaurant in St Michael was charging for their […]
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John2
There is a difference between Spending power (increasing / decreasing ) and it effects on a persons getting richer / poor .
Positive inflation will decrease a poor person spending power
Negative inflation increase his spending power but will not make him one bit richer if he still have to spend all his money to survive.
U get richer if u are able to save/invest and that is so in both positive and negative inflation
U get poorer if u savings/investment ( accumulated wealth) decrease and that can happen positive and negative inflation
Two persons can have the same SALARY under the same economic/inflation conditions the one tha is able to save/invest the most from the salary is become richer than the other even though their spending power remain equal.
There is also a difference between salary and income
Some Bajan accumulated wealth ( got richer ) by supplementing their WAGES/SALARIES By addition income form backyard farming etc
Financing property/ home is another way of obtain generational wealth. If it is done through the credit Union then the interest comes back to the member and is another source of INCOME. The property/ house is then passed on to the children which can add to the becoming richer even though the spending power of the dollar is continuously being depleted
If the the parent die before the property is fully paid off the CU usually take out life insurance on the mortgagee and recover the full loan while the beneficiary receives the property fully paid off
Now I can accept that inflation cause a devaluation of the dollar / reduces it spending power. And I know that the poor struggle the hardest.
Again – when I see the amount of vehicles, the sizes of the houses and the reports of the billions in the banks and credit unions I can never accept that Barbados (over all ) is poorer today than we were 5, 10, 20…… yrs ago
Or that MM (either one or both) became the same rate poorer than John A last year
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Go exactly one year to the oct 22 3q annual report and see who it was the was trying to throw cold water on the former governor prediction of growth of the rate of growth for this year AND of a robust winter season and one will see the pattern forming
Same one who in the lost decade would be advising of the need to grow the economy
The blogmaster invites you to join the discussion.