4.4% Growth, NTSH

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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?

Nothing to see here!

2023-10-27-12-14-44-Review-of-Barbados-Economy-Jan-Sept-2023Download

79 thoughts on “4.4% Growth, NTSH”


  1. Growth what! Neoliberal economy still does not know how to substract.

    More generally, it has been good to see the criticality of the powers that be here again arrive at the point within a well established cycle where criticisms of the regime is centered.

    It’s pass due!

    Certainly, the environments around are not at all well.

    Particularly, notions about freedom and democracy around the world are on the retreat.

    We speak of the banning of demonstrations, free speech etc.

    On economy the Western regimes seem to have abandoned the economic satisfaction their population have long yearned for.

    Instead, a hieghtened militarism is the order of the day.

    The war economy, long globalized, is where the real growth is, has been.

    In any event these fallacious arguments about growth by an IMF agent at the CBoB are at best a concession that the economic elites and the political elites have conjoined to give us fascism, full blown!

    And these are the two necessary but insufficient conditions that Mussolini insisted on within its first epoch.

    Reply ↓

  2. Well I didn’t able to read the who Palabra so will just ask one question.

    Has the TOTAL level of economic activity surpasses 2019 yet? That would be the pre covid year for those with short memories.

    Reply ↓

    • @John A

      This is how the Governor phrased it:

      Barbados’ economy expanded by 4.4 percent in the first nine months of 2023, the largest ninemonth expansion since 2006, excluding the pandemic recovery period. This performance also
      accounts for the tenth consecutive quarter of economic growth. Broad-based growth boosted tax
      collections1
      , improved labour market conditions, reduced the debt-to-GDP ratio, narrowed the trade
      deficit, increased foreign reserve levels, and improved credit quality as well as bank profitability.

      Comparison to prior years was based on 9-month intervals. However you question is redundant because the reliance on tourism has not changed although the Governor was heard pushing his broad based growth narrative.


    • Drop ‘likely to continue’

      Inflation is trending down, but Central Bank of Barbados Governor Dr Kevin Greenidge does not expect this to result in lower prices for Barbadian consumers.

      Reiterating that Prime Minister Mia Amor Mottley had announced her administration would soon outline measures to cushion the impact of price increases, Greenidge said that “as the economy settles down we expect that inflation will continue [to decline]”.

      However, he added that “prices never decline in any country, particularly in a small country, but what you don’t want is the continual increasing. It is starting to slow down at 4.4 per cent, so we expect next year roughly three per cent [inflation].

      The Governor was speaking yesterday during his thirdquarter press conference at the

      Courtney Blackman Grande Salle at the Tom Adams Financial Centre.

      In its January to September economic review, the bank reported that inflation continued to slow during that period.

      “Inflation continued to slow. The point-to-point inflation rate slowed to 4.3 per cent in July 2023, from 6.4 per cent one year prior,” the report stated.

      “The gasoline and electricity sub-indices continued to decline. Lower oil prices over the first nine months of the year eased imported inflationary pressures despite the recent uptick in global energy prices, which resulted in a 1.7 per cent increase in average crude oil prices in September.

      “Freighting and distribution expenses benefited from relatively lower average energy costs and the resolution of supply chain challenges from the pandemic era,” it added.

      The economic review added, however, that “domestic factors continued to weigh on the inflation rate”.

      “Despite higher overall agricultural production, shortages of tomatoes, cabbages, sweet peppers, carrots, and sweet potatoes throughout the first half of the year drove up the price of local vegetables,” the bank said.

      “International shortages of vegetable oils, seeds, and other grains due to the collapse of the Black Sea Grain Initiative, combined with higher local prices for meats and fish, exerted upward pressure on inflation. Rising demand for dining, recreational and cultural activities, and general economic growth, also contributed to keeping inflation elevated.”

      Greenidge said prices in Barbados were stable but “also high”.

      “Prices in Barbados, because we are a small country and import . . . let us be real, prices relatively are usually high, people say we are a high-price destination. What we want to look at and control is the rate of increase in those prices, which is inflation,” he said.

      “In our best of times because we import, most of us, what we want from USA, UK, Canada and have a fixed exchange rate, we will tend to have the same inflation rate as those countries. It is impossible to have a lower inflation rate than the United States when you are taking your goods from there.

      The economist said that “as the economy gets bigger and starts to settle at a kind of constant growth rate . . . we may see inflation taper down to about three to three and a half per cent”.

      “The other thing is that the more we as a country become less reliant on [imported] fuel the more we are going to find that we are able to settle at lower inflation rates, because you would be insulating yourself from [fuel] price increases.”

      “The more the country can ensure food security, growing our own food in partnership with our regional partners, then sharp increases [in] commodity prices, exogenous shocks, will have less of an effect and we will start the settling-down [of inflation]. But unless you get into the old years of when Japan had deflation, no country in the world sees falling prices,” Greenidge asserted. (SC)


      Source: Nation


    • Good news!!!


      Employment rate improving, says Governor

      Barbados’ employment situation continues to improve and Central Bank Governor Dr Kevin Greenidge is hopeful that increased investment will provide more jobs for Barbados.

      With Government increasing its investment, he wants the private sector to play a bigger role in this regard.

      In the Central Bank’s January to September economic review yesterday, it reported that “the number of unemployed persons fell in the second quarter”.

      “The unemployment rate declined from 9.3 per cent in the second quarter of 2022 to 8.5 per cent by the end of the same period in 2023. Employment in the wholesale and retail trade, and the transport and communications sectors rose relative to the same period last year, with the improvement in overall economic activity,” the Governor shared.

      “Additionally, there were other key indicators of labour market recovery: more job seekers spent fewer than three months searching for work; unemployment claims continued to trend around pre-pandemic levels. With more workers retiring, the labour force participation rate contracted by 1.9 percentage points.”

      In the economic outlook, he said the reduction in unemployment rates “further underscores the positive trajectory, as the nation builds on its ongoing economic momentum”.

      Greenidge attributed the increased employment opportunities to the fact that the economy was growing in a sustained manner.

      “In my view, we are now starting to get what we would call in economics some sustained growth because it’s broad base growth, it is growth that is strengthening all the economic fundamentals. You are seeing it in employment, you are seeing in all the other indicators, and that means that we are able to lift our growth projections over the medium to long term,” he said.

      “That will redound to the benefit of all Barbadians. It means more employment opportunities, it means that we may be able to push unemployment rate even below the lowest – 7.2 per cent. We may be able to get below that where we are heading.

      “But, in order to maintain that, it is going to require a level of investment that is needed from both Government and private sector,” the Governor said.

      (SC)

      Source: Nation


    • You would think something as important as an electricity rate review would have been fast tracked and processed with urgency given the importance of energy cost as a key input to cost of living.

      Rider review next for FTC

      Efforts will be made by the Fair Trading Commission (FTC), “where possible,” to move quickly on the Barbados Light & Power’s Clean Energy Transition Rider (CETR) application.

      However, chief executive officer of the FTC, Dr Marsha Atherley-Ikechi, cautioned that while the FTC recognised the urgency of the decision to the renewable energy sector, the guidelines of the CETR were established since inception.

      She also made it clear that the motion to review in the two-year-long rate case was priority. In outlining the CETR review, Atherley-Ikechi disclosed that a six-week public consultation formed part of the process, but stressed efforts would be made to “condense this as much as possible”.

      “The basic tenets of the Clean Energy Transition Rider were agreed upon and approved a few months ago. What the utility has applied for is the coverage of storage under that programme, that application was received earlier this month, and we are in the process of reviewing the application to determine whether all that is required has been provided,” Atherley-Ikechi said.

      “Once that is done, we are going to have to undertake the necessary process of assessment which should be a much shorter process than the conventional application programme. Once that is done there is a level of consultation that must take place. We recognise the importance of the particular request and therefore the expectation is that we would seek to expedite as much as possible, but a definitive time frame will not be possible,” she said.

      On Thursday, managing director of the Barbados Light & Power Company, Roger Blackman, disclosed that the grid had reached 89 megawatts (MW) of the 100MWs it can currently accommodate. As a result, he added, there was a slowing of renewable energy connections to the grid, creating the potential for backlog in the system.

      He also revealed that the company made an application to the FTC under the CETR to recoup $600 million in investments in batteries and other crucial technologies required over the next five to seven years. Since then, investors, installers and financiers of photovoltaic systems revealed that the sector had been at a virtual standstill for several months, warning that job losses in the solar energy sector were imminent.

      Atherley-Ikechi noted that the CETR remained the quickest mechanism allowable under the law for dealing with this issue.

      “The CETR is intended to speak to how all of the capital expense associated with the transition is addressed. The intention is that those things are addressed, in terms of cost recovery, in a timely fashion. Those principles have already been established and therefore the time and process associated with being able to deliver a determination under this storage application, should be much shorter,” she said.

      “The legislation requires us to do certain specific things and one of them is consulting with the public of Barbados. To do that, you cannot give a time that is inordinately short where persons are not given the opportunity to fully digest the information. We are looking at democratising the space and in doing so, persons must have the opportunity to look at the information, ask questions and then provide their opinions and views,” she added. (CLM)


      Source: Nation


    • ON TRACK!

      Resilience needed, but PM says country on solid ground

      Barbadians are being cautioned that greater resilience is needed if the country is to withstand the international headwinds it must now face.

      Prime Minister Mia Amor Mottley said that with the possibility of Barbados having to deal with the ramifications of exogenous shocks, such as climate change, the war in Ukraine and the one in the Middle East for the “next ten to 15 years”, now is not the time to lose sight of the landmark goals.

      She was speaking to a sea of party supporters dressed in red, who packed the hall of Daryll Jordan Secondary School in St Lucy for the Barbados Labour Party’s (BLP) 84th annual conference.

      Mottley said the ongoing transformations were critical to the weathering of these challenges.

      Delivering her administration’s report card, the Prime Minister said the key transformation initiatives already embarked upon, including education reform, child protection legislation, justice and constitutional reform, would play a critical role in shepherding the country through these anticipated turbulent times.

      However, she assured Barbadians the country was on solid footing, noting that with ten quarters of growth recorded by the Central Bank, all the economic indicators were trending in the right direction.

      In her three-and-a-half-hour speech, Mottley addressed several areas of national concern, such as the cost of living, improvement of services at the Queen Elizabeth Hospital (QEH), the transport sector and public health.

      She announced that Government, in conjunction with the poultry sector, had reached an arrangement to lower the price of chicken. Noting that Government was “aggressive” in its negotiations, she said the aim was to ensure that “the average Barbadian could get a 1.5 kilogramme chicken for under $20, to which producers and retailers had agreed”.

      Stressing that the five per cent reduction in feed prices by the country’s lone feed manufacturer was not enough, considering that the price of inputs such as corn had fallen significantly in recent months, Mottley disclosed that two new feed millers would be entering the market space, which should result in lower feed prices and, ultimately, lower cost of chicken “by next year”.

      “This Government, when we realised how difficult it was to keep the [Food Prices Social] Compact, we determined that there were a few things we had to go back for, and poultry is one of them. Barbadians probably eat the most chicken per capita in the world. When we realised what was happening late last year into early this year, we encouraged the establishment of an additional feed mill in this country. In fact, it has now become two new feed mills that will become available to produce animal feed in Barbados,” she said.

      “Do you know that in 2022, the world market price of corn was 38 per cent higher than it is today and the world market prices for soya was 25 per cent higher than it is today? Yet the price of feed has only come down by five per cent. I don’t expect it to come down the full amount . . . but a five per cent reduction is not enough.”

      As it relates to health care, she said Government heard the cries of Barbadians regarding the long waiting periods in the Accident & Emergency Department of the QEH. Mottley said that in addition to the further expansion of this department, plans were in the pipeline for investment in modernised systems to address the backlog in urgent care.

      Mission spread

      “I know that it is not only equipment, but it is also the systems. I have asked the senior minister [Dr The Most Honourable Senator Jerome Walcott] and we have agreed that in addition to systems and communications, we spread out the mission.

      It is not going to happen overnight, but it must happen,” Mottley said to loud applause.

      “This is one of the most important things that we must do as a Government because life and death rest in that building. I am satisfied that we have good people, but good people with archaic systems and even new facilities will not work. I am happy that two weeks ago the doctors have started a nine to nine shift that takes phone calls to be able to assess what is urgent and what is not, with respect to those coming to Accident & Emergency. With the expansion and the change systems we hope to bring this out of the box.”

      Noting that garbage collection had dropped in consistency of late, the Prime Minister informed that seven new garbage trucks were on the way. She also promised there would be a more frequent change-out of older trucks.

      Yesterday was Day 2 of the 85-year-old party’s annual conference. It got under way at 3 p.m. with several ministerial report cards delivered.

      These included those of Minister of People Empowerment and Elder Affairs Kirk Humphrey, and Minister in the Ministry of Finance Ryan Straughn.

      Proceedings were off to a slow start but quickly picked up in momentum as it drew closer to the main event. The Prime Minister graced the stage at 4:35 p.m., greeting supporters as she made her way to the stage to the soundtrack of Buju Banton’s Lord Give I Strength.

      (CLM)

      Source: Nation


    • PM Mottley maybe telling the private sector, I have the last laugh for refusing to renew the consumer prices compact.

      Mottley puts companies on notice

      Government cannot guarantee the low corporate tax rates enjoyed since 2018 by domestic and international businesses domiciled in this country.

      This was disclosed yesterday by Prime Minister Mia Amor Mottley, who put businesses on notice that in an effort to ensure Barbados remains off the blacklist of the Organisation for Economic Cooperation and Development and other international regulatory bodies, consideration must now be given to the global minimum tax rates of 15 per cent for companies of a certain threshold.

      In 2018 Government lowered the corporate tax rate across the board, with companies currently paying between one and five per cent.

      Addressing the Barbados Labour Party’s 84th annual conference yesterday at Daryll Jordan Secondary School in St Lucy, Mottley said: “I am going to speak straight. I am going to have to address the country in a few weeks’ time on corporation taxes and a global minimum corporate tax. In 2021, all of the countries in the world, except for a handful, agreed that corporation tax should be increased to 15 per cent as part of a minimum global tax for companies over a certain threshold.”

      Promising to go into greater detail at a later date, the Prime Minister said the international business sector had taken a nosedive in the last decade, a state of affairs which could not be allowed to continue.

      “What is the anatomy of our corporation taxes?

      We collected about $470 million last year, but when I was Minister of Economic Affairs in 2007, we were collecting $520 million. You know why it dropped to rock bottom? It was because our relationship in the international business sector started to change and the benefits that we got from Canada started to dwindle. What we now have is that the $470 million comes from outside of Barbados; now that can’t continue just so,” she said.

      Mottley noted that the tax cuts enjoyed by businesses for the last five years would have served as a buffer during the COVID-19 pandemic.

      However, she expressed disappointment that more businesses did not seize the opportunity to invest those savings in growing the economy. She also made it clear that should Barbados be blacklisted again, the country ran the risk of losing some of its long-standing international businesses.

      “What we were able to do was to create a bounty for all of the corporate taxholders, small and large, in this country and you got it at the time you needed it the most, during COVID. We cannot guarantee that going forward because of the global circumstances, and it would mean that if we try to do things that are too risky and too flashy, we will get blacklisted again. If we did, [we would be at risk of losing] companies that have been with us for over a hundred years,” she said.

      “I would say this, if I had a disappointment, it is that our domestic corporate taxpayers have preferred to keep their money more in the banks.

      If we don’t invest, then we cannot grow.”

      (CLM)

      Source: Nation


    • Always a moving target by G7 to regulate and protect capital north south flows.

      AG: Barbados soon off grey list

      Barbados is the closest it has been to being removed from the controversial grey list issued by global money laundering watchdog the Financial Action Task Force (FATF).

      This was confirmed by Attorney General and Ministry of Legal Affairs Dale Marshall, who said the FATF Plenary on Friday “reached agreement that Barbados had successfully completed its action plan and qualifies for an on-site visit early next year”.

      This is the final step in Barbados’ quest to be removed from the FATF list of Jurisdictions Under Enhanced Monitoring, otherwise known as the grey list.

      Marshall explained that Barbados’ removal from that list would signify that the country had made substantial progress in strengthening the effectiveness of its regime to combat money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction.

      It also means that “having had an on-site visit approved, Barbados is one step away from being delisted and this will then confirm to correspondent banks, existing and prospective investors, that we remain a safe and reputable jurisdiction to continue to do business, both at a domestic level and at an international level”.

      The FATF said separately that at its October 2023 Plenary in Paris, France, it “made the initial determination that Barbados has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of the anti-money laundering/counter terrorist financing reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future”.

      Marshall, who along with Central Bank of Barbados bank supervision department director Cheryl Greenidge, represented Barbados at the meeting, said: “This has been quite a journey since our action plan was adopted in 2020. A trigger in this entire process was financial sector assets reaching the amount of US$5 billion. We have always been uncomfortable with this criterion, since it does not take into account such things as risks, and that casts doubt about its suitability in determining a country’s impact on the global financial system.”

      In explaining the need for the on-site visit, Marshall said: “Barbados, since the adoption of the action plan, has put a large and varied body of measures in place to address the recommendations from its fourth-round Mutual Evaluation Report.

      “Some of these measures were statutory and others had to do with improving our regulatory and law enforcement frameworks. We have addressed all of the areas in the action plan, and the FATF now needs to be satisfied that the measures are in fact tangible and sustainable. Every country that is in this process has to go through an on-site visit.”

      The Attorney General explained that during the on-site visit, scheduled for early 2024, the FATF assessors would engage with all of the regulatory agencies, law enforcement, the judiciary, Government officials and the private sector to confirm the effectiveness and sustainability of the measures that had been implemented.

      The assessors would then submit a formal report to the FATF at its February 2024 Plenary meeting, at which Barbados will receive confirmation of whether it will be delisted. The FATF acknowledged in its statement that Barbados “has made the following key reforms, including: (1) conducting risk-based supervision of financial institutions and applying sanctions as appropriate, (2) ensuring that accurate and up-to-date beneficial ownership information is available on a timely basis, (3) improving and enhancing the use of financial intelligence, and (4) pursuing repatriation and sharing of confiscated assets with other countries”.

      Marshall reminded that the presence of Barbados on the FATF Enhanced Monitoring List triggered Barbados being placed on the European Union (EU) anti-money laundering blacklist, and that both have had a deleterious effect on doing business in and from Barbados.

      He pointed out that such was the case whether it was Barbadians or foreign investors, largely because of the negative impact on correspondent banking relationships. Correspondent banks were, in simple terms, the intermediary banks which facilitate the transfer of money into and out of Barbados.

      In the face of severe penalties levied elsewhere, these banks are often overly cautious of jurisdictions that are on the EU blacklist. (SC)


      Source: Nation


    • Governor Greenidge should temper his expectations although a return to investment grade will be welcomed. Many financial institutions will remain investment shy for some time after.

      Governor: Investment grade ratings just a matter of time

      Standard & Poor’s has become the latest of the major international credit rating agencies to conclude that Barbados’ economic reform is progressing.

      As a result, the Central Bank of Barbados Governor Dr Kevin Greenidge thinks it is now only a matter of time before the country regains its investment grade ratings.

      However, with international interest rates still high, he said Barbados, like most other countries, was unlikely to borrow on the open market at this stage.

      “The recent rating upgrade by Moody’s, the first credit rating increase from the agency since 2019, along with the improved outlook for Barbados’ debt by both Standard and Poor’s and Fitch, support domestic and international investor confidence in Government’s fiscal and economic framework,” the Governor said during his third quarter press conference on Friday.

      On Thursday S& P Global Ratings revised its outlook on Barbados to positive from stable and affirmed Barbados’ ‘B-’ long- and ‘B’ short-term foreign and local currency credit ratings.

      On August 3, Moody’s Investors Service upgraded Barbados’ ratings from Caa1 to B3 and maintained the stable outlook. Fitch ratings raised its outlook for Barbados from stable to positive while affirming the country’s ‘B’ credit rating on October 17.

      Very good

      Greenidge’s assessment was that “in terms of the rating agencies, . . . are doing very good as we start to get back towards investment grade”.

      “Keep in mind that once upon a time we were in ‘AA’ investment grade and we would have moved down . . . at least 24 notches over a period of time. So you won’t expect to be back [there] in very short order. We have had a number of grades, in fact between last year and this year all three rating agencies, Standard & Poor’s, Fitch and Moody’s would have upgraded us [or] changed the rating from stable to positive,” he said.

      “That is a statement about their confidence in the economic programme and the direction which the country is heading, that’s confidence in terms of the debt trajectory and the way we are managing the economy. If you read all of the reports, you will see that’s what they’re saying.”

      The economist added: “We did some research and in our category no other country has been upgraded this year, . . .and many have had downgrades – Egypt, Kenya, Nigeria, Pakistan, Bolivia, Bangladesh, you can go and check. And so Barbados being upgraded by three rating agencies within a two year period sends a strong signal to the market that we are doing the right thing, our policies are correct and we are headed in the right direction.”

      Greenidge also pointed out that “even the United States recently got downgraded by Fitch after 26 years, . . .this is the world we live in”.

      “So I cannot see any negativity, any negative implication, where we are with respect to rating agencies. It will take some time, we have got to stick to the plan of economic reform, we have got to stick to our [Barbados Economic Recovery and Transformation] plan to grow this economy,” he added.


      Source: Nation


    • All of the articles in support are being cranked out this morning.

      Experts: Economy on rise again

      By Tony Best

      Although Barbados has not fully recovered from the economic ravages of COVID-19, an extended period of no-growth in its economic fortunes and the fallout-from the 2018 default on foreign debt, finance officials believe the country was emerging with a stronger economic and fiscal profile.

      They also said it would take some time for the country to reduce its debt. Added to that, energy prices could rise if the Israeli-Hamas war spreads.

      Equally important, the country will need more passenger airlift.

      Officials at Fitch believe Barbados’ economic restructuring efforts were working; the productive programme with the International Monetary Fund (IMF) yielded positive results; and the country managed to tackle the hard challenge of pension (NIS) reform.

      They were some of the crucial reasons behind the increasingly positive fiscal picture of Barbados painted by two of Wall Street’s leading financial and credit analysts, Richard Francis, director of Fitch Ratings Group and Christopher Dychala, associate director for Sovereign Ratings, also of Fitch.

      Both told the Sunday Sun in an exclusive interview, that while Barbados still had much ground to cover in its recovery effort, it had performed impressively in recent years, ever since the global health crisis hit.

      “As we see it, the (economic recovery) is well underway and then there are the (other) reforms.

      It is impressive what Barbados has done on the reform front and on reducing the transfers to the SOEs and what it is achieving on pension reform this year,” said Dychala. “It is certainly impressive.

      Pension reform tackled 12 years before it becomes a real critical issue for public finances. On the whole, the balance of risk is positive.”

      Economic performance

      Francis, who has had a long and successful history on Wall Street assessing economic performances and credit risks of a host of countries agreed.

      He used the word “brilliant” to describe Barbados’ post-pandemic economic recovery last year; was quick to add that “tourism remained very vigorous” this year; and gave it good marks for reducing its debts to gross domestic product ratio and was “doing so very quickly”.

      Both economic experts were explaining why Fitch, a world leader in assessing credit risks – Standard & Poor’s and Moody’s being the other two key players – recently upgraded its outlook for Barbados’ credit picture, moving it from “stable” to “positive” while affirming the “B” rating. Dychala said Barbados had correctly moved to establish much needed institutional fiscal infrastructural innovations.

      “A strength was in one of the ways Barbados is approaching the fiscal issue from a rating perspective,” by boosting the fiscal framework and establishing a fiscal council that will more closely monitor fiscal targets,” said Dychala.

      Another bright spot in Barbados was its “proactive” approach in tackling the challenge of “the politically sensitive area of public pension fund” reforms.

      “We did see that, and it speaks to the strength of the institutions of governance in Barbados”, Francis said. He, however, warned it was going to take a long time, perhaps ten years or more to reach its target of reducing debt ratios to 60 per cent of GDP, adding, “we did see that and viewed it favourably”.

      Undoubtedly, Barbados was expected to continue its relationship with the IMF and remain committed to its BERT programme.

      “On the fiscal path which Barbados is on, running surpluses and eventually moving towards a more balanced budget, with the financing it has from the IMF programme and the expected ample multilateral financing it was getting and would continue to receive for the next couple of years, is another strength,” said Dychala.

      The analysts said Barbados was unlikely to return to the international capital markets for loans in the short-term, considering the global financial climate, characterised by “the negative global interest rate environment”.

      Regarding the impact of the Israeli-Hamas war, they said should it spread to other places in the Middle East, the situation underscored “the risks and vulnerability of countries” like Barbados that were dependent on oil imports, he added.

      “I think Barbados has a plan to shift away from oil imports and emphasise more renewable energy,” added Dychala.

      Looking to the future, Dychala saw the need for what he called a “pretty tight fiscal stance” if Barbados was going to succeed in reducing its debt target of 60 per cent of GDP.

      There was also the need for more brand name hotels and expanded airlift some of which were already in the pipeline.

      For his part, Francis described Barbados as getting back on track economically.


      Source: Nation


  3. @ David

    He skirting around the real issue then?

    After Covid when the economy lost roughly 20% one could only recover. From the bottom of the well you can only climb up. The question is based on how we spending, have we reached precovid levels of economic activity yet? We know we spending more, but where are we in real terms on the earning side?

    As far as I can see we are still 4 years later basing our hopes on the one leg economy known as tourism.

    Also if we have surpassed 2019 levels, where are we in real terms when one factors in a 3% inflation rate over say the last 4 years? The buying power of the average Bajan in other words is it better or worst 4 years after 2019, when all aspects are factored in?

    Reply ↓

    • @John A

      As previously stated the blogmaster is more concerned about our foreign investment policy making. What are we doing to grow a more resilient economy. The governor mentioned being more resilient based on current broad based growth but his optimism is anchored in the tired traditional economic model. NTSH.


  4. @ David

    When I speak to growth in REAL TERMS this is an example of what I mean.

    Say a person was working for $1000 a month and got a $100 raise he would of gotten a 10% increase.

    If however the same person lived in an economy experiencing 6% inflation his salary increase in real terms or pocket terms, if you want to simplify it would be 4%.

    Whether it’s a person or a country the same facts apply. It’s what you get to keep that matters not what you earn. That is what drives true growth and financial stability. They got fancy names like surplus and deficit bla bla bla, but in simple terms that’s how it pans out. If at the end it got a minus sign in front the number you getting poorer, if you got a plus sign you getting richer. Lol

    Reply ↓

    • @John A

      Your example about real growth and its trickle down effect on Barbadians is to focus on the symptoms of a dying economic model. Our economy by definition is an open one. All efforts by policymakers must be to introduce measures to mitigate risks that will inevitably come from exogenous impacts.


  5. Can I ask what statistics are not included in this increase?

    Do we track sex tourism arrivals/spending? Difficult to track?

    Do we have a crude estimate of the contribution of May/September romances to the economy? Difficult to estimate?

    Do we know what is the healthcare costs (diseases/emotional/psychiatric) for the young boys and girls involved in tourism? Sexual questionnaire being developed.

    Doesn’t it strike you as strange that everywhere except the Caribbean is aware of sex tourism? Difficult to admit?

    Reply ↓

  6. @ David

    You see it is ok to speak of growth but we must always remember to ask growth from where? Growth in terms of what?

    For example in 2021 and 2022 we faced a rate of inflation that most had never seen, or the older ones may have seen in the 70s. So with inflation rates say of 8 to 9 percent in 2021 and 2022 you can imagine the increase in earnings one would need to have made to keep pace with that. Basically it would have been impossible to compete there.

    So all this report thing is good, but to me and for a country, my question is ” is the average Bajan better off today than in 2019?” To that I say the answer is no, as their salary has not kept pace with inflation and especially not the hyper inflation seen as a result of covid.

    Reply ↓

  7. We see Mottley dancing in the crotch of her political opponents, if one may so ascribe.

    Indeed, a one-party state. What a political gift has Stuart and his regime created for her!

    And with the fools leading the DLP this one-party stateism has been fossilized.

    Reply ↓

  8. Moreover, it’s quite easy to beat up on a Carpentarian sock puppet of a DLP.

    A DLP which over two elections could not even muster the seat of EWB in St.John.

    Maybe Mottley just exercised some political muscle to give the brassbowls a sense of blood in the water.

    Mottley even cuss people like Bushie who care not about either. Her reasoning is that any criticism of her must be coming from the dead dlp or pretend independents, like she presented Caswell Franklyn to be.

    And in these conditions the dead dlp remains as misguided to have another Sandiford, another Stuart, another Mascol, another Depeiza, a man who was recently well predisposed to either tribe, a man who seems not to have any ability to carry the party financially, a man who lacks any iota of charisma, making sure that the dead never rises again, far less beat a political elephant like Mottley.

    Reply ↓

  11. gets re-elected. He can join Putin and Xi as he invades Canada and Mexico. That gives him more natural resources and a massive population with a more defendable southern border. The Americas aligned. A trilingual Nation.

    Reply ↓

    • @Sargeant

      What is the solution? It is easy to be critical.

      Read Russell’s article.

      A plaster over a festering sore

      THE PRESIDENT OF the Barbados Association of Retired Persons (BARP) has revealed that by 2050, it is expected that half of the country’s population will be over 65. That means that men and women will be on the verge of retirement or past their maximum productive age.

      I am finishing my 84th year (Deo Volente), and by 2050 I will be 111 (Deo very Volente). I wish that by then I would be able to recall the many articles that I have written concerning the population of Barbados and the need to either do something about our reproductive habits, or to consider inviting foreigners seriously for a population increase.

      Reproduction now will not really help, as the problem is immediate. Both men and women have now agreed that the workable children count can only be two. Of course there are exceptions, but not sufficient, and those that are producing more are mostly part of a different problem.

      But looking at the scenario today, it is telling us that most of our efforts and that of the Government will be consumed with providing for the aged and training for those who cater to the aged.

      The female element of this estimated over-65 will be of no help in increasing the population. They will be past reproductive age but perhaps at an age where they would be making strong demands on aged males past their effective usefulness or even younger males who should be concerned with the duty to increase the population. Indeed, the males of the population will be concerned with their own survival obligations. We see it already in males opting out of certain professions like law and medicine.

      The males and females we have now are hard to manage. It is not to say that those who could have not been working hard at replenishment, but there is an implacable factor on the requirement of replacement. The cost of children has skyrocketed and Government has not been of any help with demands reasonable or unreasonable.

      But the biggest issue of all is the Barbadian himself. We are unable to attract our youngsters to stay in Barbados. Some go away claiming persecution of their modern lifestyle, while others complain of dwindling job prospects. Some are teased away by foreign concerns taking advantage of a good education system that is now being questioned by us.

      BARP’s problem will be made more difficult by the many issues outlined by the president. Legal problems will multiply as we get older and perhaps more doltish. We become tired of our partner and wish to live alone. How will we divide the spoils?

      Nearing death and not able to carry anything in our coffin (except we are like the old Egyptians), we want to control life from below.

      One of the worrying things about the aged is the impact on health. Health problems could manifest themselves in such a way that the individual is physically or mentally impacted. In both cases, remedies depend on the individual to help or to be able to avail of family or Government facilities.

      Right now with Government’s resources heavily stretched, the prospects of further assistance is bleak. Furthermore, Government borrowings are stretched to the limit with little hope of improvement.

      However, by 2050, a new public hospital will be built. But a new hospital will be insufficient to combat the expected increase of mental diseases that even now we see affecting an ageing population. This means that the expected older age of the above 65 will in itself breed more problems.

      Try as we may, an ageing population affects the output not only of Government but also of everybody. Logically, we really need more bodies.

      We once had a situation when CARICOM worked.

      People would arrive from other islands, spend a day in Barbados or stay for an indefinite period and contribute in various ways to living. However, with the improvement in CARICOM arrangements, such a fluid situation no longer exists.

      We do not have the financial ability to consider the wholesale importation of people from say, Haiti, as such a move would involve providing jobs, housing and so on, something beyond our resources even for our present situation.

      Therefore, the raising of the issue by BARP is a call for help for a situation that has been simmering for a long time but may now be one with which we have to live. It is one that does not really attract me to 2050 or even members of the vaunted organisation.

      Harry Russell is a banker.

      Source: Nation


    • Keep hope alive.

      Scope on HOPE

      by SHAWN CUMBERBATCH

      shawncumberbatch@nationnews.com

      GOVERNMENT SAYS it has one of the newest state-owned enterprises (SOEs) “under close surveillance” regarding its ability to generate enough money to start paying a $38.2 million debt.

      That SOE is Home Ownership Providing Energy (HOPE) Inc.

      “The ability of HOPE Inc. to generate sufficient cash flow to service its liability of $38.2 million to the Housing Credit Fund – $2 million per quarter commencing March 2024 – is also under close surveillance,” the Ministry of Finance outlined in the Barbados Medium Term Fiscal Framework 2024/2025 to 2026/2027 which was laid in the House of Assembly on September 22.

      HOPE Inc. is among SOEs, including several being reformed under the Barbados Economic Recovery and Transformation programme, which the Fiscal Framework identified as having potential challenges with either their debt or pension liabilities, and in some instances both.

      Arrears

      Some entities also have millions of dollars in arrears on their books, while the Barbados Agricultural Management Company (BAMC) and National Housing Corporation (NHC) “are at risk of requiring higher than forecast subventions from the Central Government until the planned reforms have been completed”.

      “SOE long-term debt liabilities totalled $841 million at March 31, 2023, and appear generally to be manageable without Central Government assistance.

      Debt balances at higher risk include BAMC’s debt liability of $22.7 million for its storage tanks (repayable at $1.45 million per year) and a bullet payment of $29.5 million due by Barbados Water Authority [in] 2028/29,” the fiscal report stated.

      Management of the Housing Credit Fund, to which HOPE Inc. has the liability, will be transferred from the Ministry of Housing to the Central Bank on February 1, 2024.

      The Central Bank previously stated that the Housing Credit Fund “operates as a second tier mortgage market wholesaler and provides funds to financial institutions which in turn on-lend to individual borrowers”.

      In the bank’s 2022 annual report, it said that “disbursements of $18.8 million were approved, resulting in total loans outstanding of $29.8 million.

      There were no repayments for the corresponding period”. The report also said the fund had net assets of $119.1 million and a net loss of $5.4 million in 2022.

      HOPE Inc. is central to the current administration’s pledge to “create 10 000 housing solutions over five years”.

      Challenges

      Earlier this month at the official opening of the Alleyne’s Court, Whitepark Road, St Michael housing estate, Minister of Housing Dwight Sutherland spoke about challenges related to the first major HOPE Inc. project where 154 houses are being constructed at Lancaster, St James.

      Reporting that 57 of the houses were ready, he said: “We’ve had challenges with conveyances and banking details, which we are working on. We had issues with utilities but those have been resolved. We expect everything to be resolved this month and people can move in from next month.”

      Under the HOPE project, 92 homes are being built at Colleton, St Lucy; 202 at Pool, St John; 154 in Todds, St John; “around 50” in Guinea, St John; and 142 units at Concordia Gardens, also in St John. Homes will also constructed on 120 acres of land identified at Vineyard, St Philip, in a joint venture between HOPE Inc and the NHC.

      Outside of liability concerns of HOPE Inc. and others, Government said in the Fiscal Framework that transfers to SOEs were forecast at $570.3 million during the current financial year, but that such funding was expected to be reduced following SOE reforms.

      Source: Nation


  13. as Russia Central Bank jarks interest rates by 2% to 15%. Though inflation only hit 6% in September, this is considered high vs the 4% target.
    The Rouble has lost 25% to the weak US dollar since the Ukraine operation began.
    As Ukraine gets the focus, Russia has been slipping into every facet of Georgia. Home to a growing Russia population as people fled conscription.
    You can check out anytime, but you can never leave!!

    Reply ↓

  14. John A has explained this situation in as simple terms as can be imagined.

    That this analysis escapes the Governor is a MUCH more frightening scenario than is Bushie’s initial instinct that he is just faithfully seeking to support the Empress’ insistence that she is fully clothed….

    Suppose the Gov REALLY cannot see the folly of judging ‘growth’ by using GDP numbers in an economy that is plagued with rampant inflation?

    How the Hell could he then see the critical value of INNOVATION, CREATIVITY, MAXIMIZING PRODUCTIVITY, and of SUCCESSFUL LEADERSHIP in ANY hope of future growth?
    …he may ACTUALLY BELIEVE that we just need more brass bowls in the place…

    LOL
    From the Governor’s assessment, the higher prices rise in the supermarkets, the higher will be the GDP, … and the more ‘solid’ will be the national ‘growth…’

    …our donkeys are headed for a steep cliff….

    Reply ↓

  15. If we go by inflation the Barbados never even had real growth if you go beck further that one year when making ur comparison. The alway present inflation alway outstrip the wages increases

    Reply ↓

    • example once u could get 10 flying fish for a $. U can barely get one for a $ today so where we better off back then than we are now?


    • @John 2

      What are we discussing, nominal growth or real growth. As Bush Tea stated we need to educate the public and stop feeding them with glossy presentations. Then again, Barbadians are labeled an intelligent people.


  16. @ John2
    “…..so where we better off back then than we are now?”
    ~~~~~~~~~~~~~~~~
    Or put another way…
    Maybe worse off today than we were back then…

    Perhaps you are now seeing how it is, that slavery NEVER ENDED.
    It just transformed from physical bondage with iron chains, to economic and psychological enslavement …with chains on the minds of brass bowls.

    Reply ↓

  17. When I look at the houses and amount of cars in bim the over all living conditions back then compared to now I can never say we are worse off now than back then because inflation was a lot lower
    And yes -The economy is much larger now than back then even though inflation alway outstrip wages increases (overall )

    Reply ↓

    • All the houses and cars are being financed from cash or credit? Also is the requirement to borrow more stringent than before? The other point to make is where are you drawing the line to support your casual observation.


  18. Also, what EXACTLY does ‘better off’ mean?

    If we measure in terms of material possessions, then we can just find a benefactor to lend us about $200 billion so that we all become immediate millionaires, BUT then we must agree to all and any terms imposed on our donkeys via the ‘concessional loan’.

    If we are talking about INDEPENDENCE, and standing on our own two feet, and being able to speak our minds as WE see fit, and being ‘satellites on none, but friends of all’….

    Then this ‘material progress’ represents being MUCH WORSE off…

    But many brass bowls are comfortable once they have vaseline…

    Reply ↓

    • @Bush Tea

      We can raise the bar by saying, are we seeing an increased level of innovation and creativity in the country? If yes how is it being translated to increasing export earning. How is it being translated in a wholesome society which captures the intangible characteristics of ‘helping your sister and brothers, old people etc. what is the use of growth and our quality of life is going down the toilet?

      It if now, does it mean an ineffective use of resources and debt/borrowing acquired?


  19. “example once u could get 10 flying fish for a $. U can barely get one for a $ today so where we better off back then than we are now?”

    I try to avoid heavy lifting, but every now and then I see a stone that I think that I can lift. I may fail but I will try

    🙂
    @J2: Are you saying that we are 10 times worse off the before?

    How do I factor in the fact that my neighbor would once give me some free sweet potatoes but now I have to buy them from him? It could be even worse than we thought.

    🙂 🙂 🙂

    Reply ↓

  20. What makes using GDP such a terrible metric is also the debt trap it creates. The guidance from IMF and its acolytes is lower your debt to GDP so you can borrow more money from us and our friends IDB, World Bank etc. on projects that in theory should increase GDP. Successive governments grab at the money and use it for poorly thought out projects with inflated costs (after all they have to feed their friends and fund the next election).
    Initially things look better because shovel ready projects employ people right away. The governor and friends are then quick to show the debt to GDP is on a downward trend but repairing a long overdue road will not bring new businesses, building jet bridges will not increase airlift, buying electric or ICE buses will not ease traffic and launching a digital ID will not make government more effective or efficient.
    The fact is the only thing the country ends up producing more of is debt, both government debt and consumer debt but whereas in the past most of the consumer debt was for property ownership and education, now it is for cars and consumption.

    Reply ↓

  21. Houses financed – they must have an income to justify the financing. Compared to back in the day when u had to finance a board at a time

    Anyhow u two trying to push me into another discussion
    Was just point out that the no real growth because of inflation or high inflation don’t carry water

    Check the inflation graph in the CB report
    2020 the lowest inflation in las 4/5 yrs. We we better off then than we were in 2019 or today because we had higher inflation?

    In 2020 is whe the economy tanked because of covid
    GDP down bout 20%. (Or should that be readjusted because of the low to negative inflation. ) unemployment about 50%. Etc

    Reply ↓

  22. T0

    How would ur example be factored into or recorded in the CB report? Or do u think all that kind of stuff should be in the reports?

    Leaving now so won’t respond today

    Reply ↓

  23. @David
    What is the solution? It is easy to be critical.
    ++++++++
    That wasn’t a criticism more likely an observation, but I was surprised at the territories to which the comparison was made as they are hardly economic powerhouses, but Singapore has been overused. A cynic may query what the respective populations were of e.g., Jamaica and Trinidad, two islands with more natural resources and what economic benefit did they derive from any significant increase in population during the same period.

    I leave the heavy lifting around economics to those who are more qualified however the PM spoke of a “problem” but didn’t propose a solution but perhaps she and her cabinet are working overtime to come up with a remedy before publicly announcing policy to address the challenge.

    For the most of the past 60-70 years we have encouraged our citizens to leave via BOAC/Pan Am and SS Surriento to seek greener pastures, indeed we have extolled the benefits derived from those citizens through remittances but now we are (according to the PM) seeing the flip side of those policies.
    There is no magic bullet.

    Reply ↓

  24. 😀
    Took me a while to figure out who was TO.
    My example was merely to poke at you. My resume has “unable to perform heavy lifting. Can spot a scam from miles away.”

    Reply ↓

  25. Can you imagine John( 🐇/🐰) working in the Central Bank of Barbados?

    Suddenly, you have numbers showing that the Bajans economy is much larger and growing faster than that of China.

    Without knowing it, we dodged a bullet.

    Reply ↓

  26. Don’t get me wrong I am not saying that the Governor is not correct in the figures he supplied, what I am saying though is that those figures do not speak to the economic reality of the average Barbadian.

    As Bush Tea pointed out in the GDP is the factor of inflation which many Don’t understand. For instance if the economy was a shop and the prices in the shop all increased due to inflation, then the GDP of the shop would increase. What happens though to those poor bajans that have to buy groceries in that shop? Are they better off now because the shop has achieved a higher GDP or are they in fact poorer?

    Reality vs presentation.

    Reply ↓

    • Mistake here is the an economy is not just a shop. In an economy if prices in that shop is too high for the customer and they seek the goods else where then what is going to happen to that shop goods and gdp? I understand what u trying to show but u cannot put one shop in a vacuum and compare it to a Dynamic economy

      And as I said before inflation was with us from the beginning. Not just now

      U guys are using inflation to water down the good news of positive growth

      View the graphs below u will see when we were experiencing higher level of inflation we were also experiencing negative gdp growth
      So although ur one shop example may seems true to you it is not

      Inflation is just another statistic

      https://tradingeconomics.com/barbados/inflation-rate

      https://tradingeconomics.com/barbados/inflation-rate

      @david

      Financing was also with us. It great to see the we can afforded house and transportation especial the credit union. I remember when we had to finance school uniforms via the coolie and food iteams via the village shop


    • @John2

      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.


  27. Put another way ask the average person who runs a home and has not received a sizable raise between 2019 and today, if they have more money in their wallet before payday now than in 2019?

    Below is a simple way of calculating if you are better off today than before.

    After tax earnings – expenses = surplus/deficit.

    Reply ↓

    • @John A

      Is it fair to also say that a government has to address the macroeconomic situation before it can benefit the man in the street? Can you do both given the state of the Barbados economy in the last 15 years or so?


    • 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.


    • John2
      “too large a deficit”
      I thought we were in surplus trajectory?


  28. @ David

    To be honest I think the reason why many Bajans pay little attention to the CB report is they would say ” it don’t help me cause things tight.”

    In other words the formal presentation does not reflect what they are feeling in their day to day life. I also believe that inflation is the least understood issue in Barbados today. In other words how does inflation affect me and how come with growth at 4% I catching my tail every month?

    Some here would like to remove the topic of inflation all together from this discussion, but you don’t take the central bank report into Massy when you shopping! So in the same country where economist say things are growing, the welfare department may say we have more people coming for assistance then ever before.

    So let me ask you this, which country below would you prefer to live in for the past 5 years not having received a raise over that period?

    Country A has growth of 3% but inflation of 1 % on average over the last 5 years.

    Country B has growth of 4% but inflation of 3.5% on average over the last 5 years.

    Although country B may have achieved higher growth than country A, in which country do you think the month end liquidity of the average person would be higher? Or in Bajan terms where you think ” he would catch he ass less in?” Lol

    Reply ↓

    • @John A

      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.

      Where do we go from here?


  29. 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.

    Reply ↓

  30. 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

    Reply ↓

  32. 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

    Reply ↓

  33. @ 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.

    Reply ↓

    • 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?


    • 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.


  36. 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.

    Reply ↓

  37. @ 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

    Reply ↓

    • Interesting

      Appetite for bonds

      by SHAWN CUMBERBATCH

      shawncumberbatch@nationnews.com

      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


  38. “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.

    Reply ↓

  39. @ 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.

    Reply ↓

  42. Pingback: INFLATION AND ITS REALITYBarbados Underground


  43. 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
    =====.

    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

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