Review of Barbados Economy in 2023: growth up, unemployment up
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109 responses to “Review of Barbados Economy in 2023: growth up, unemployment up”
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OFF MESSAGE:
The United Snakes of America have started bombing Syria for the death of 3 black Americans! I guess black lives matter when they are wearing army greens. Quaker John will be very happy. -
hants on February 2, 2024 at 12:36 PM said:
Rate Thisin Canada eh.
https://www.cbc.ca/news/canada/hamilton/sugar-refinery-hamilton-1.7085718
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Hants
What are the economics of the plant and associated rail infrastructure?
“Today the sugar industry produces approximately 1.2 million tonnes of refined sugar in 4 plants in Vancouver, Toronto, Montreal and Alberta (beet sugar). About 90% of Canada’s refined sugar is produced from raw cane sugar imported from South and Central America and the balance from domestic sugar beets in Alberta.”
Looks like the bulk of the raw sugar is imported at world market prices. The output of refined sugar will almost double with this new refinery.
Brazil is probably a major supplier.
No Government subsidies.
“Canadian sugar users enjoy a significant advantage – the average price of refined sugar is generally 30 to 40 per cent lower in Canada than in the U.S. Most manufactured products containing sugar are freely exported to the United States and other countries.”
https://sugar.ca/international-trade/canadian-sugar-market/value-of-sugar-to-the-canadian-economy
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Bushie would fire the shiite ‘man of the house’ and bring in some new blood…. ALL 30!!
…but if 6 YEARS later he still talking shiite about the OLD fired jokers …while the house getting worse…
Boss, we looking at a LOT more than firing now…
How long does it take 30 NEW house dwellers to find a good carpenter? …before we have to bring a whacker for their donkeys?
Talking ‘bout houses though!!… what is the latest on the steal houses? is there really a fire sale…? LOL
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Well, what’s new. Their satrap does this all the time, but nobody will care until………
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For the last couple of days they’ve been trying to get the Persians to accept a marginal strike on their territory to no avail. Some may say a act of weakness but countries do these kinds of things all the time to manage the escalator. So Syria, “the punching bag”, moves stage centre again. In anticipation of these strikes, the Persians brought home their senior people from the region.
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Biden will reap what he deserves soon.
~~~~~~~~~~~~~~~~~~~~~~~~~~
Not only Biden…
ALL BRASS BOWLS….It will be unlike ANYTHING that has EVER happened before … or will EVER happen again…
What a time to be alive..!!!
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@enuff
Did Arthur fix the house during the boom years?
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@enuff
Don’t point to the action of a minority group to explain away the point being made about the economy.
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In the Americas
Black Lives Mater (for elections only)
(It’s Economics)Lately I’m not feeling like myself
When I look into the glass, I see someone else
I hardly recognize this face I wear
When I stare into her eyes, I see no one there
Lately I’m not feeling like myselfLately I’ve been losing all my time
All that mattered to me slipped my mind
Every time I hit another town
strangers appear to lock me down
Lately I’ve been losing all my timeThe mystery that no one knows
Where does love go when it goes?Lately words are missing from now on
Vanished in the haze of love gone wrong
There’s no future, there’s no past
In the present, nothing lasts
Lately someone’s missing from now onThe mystery that no one knows
Where does love go when it goes?
The mystery that no one knows
Where does love go when it goes? -
This explains why the economy of Barbados behaves like it does since the last period of real growth after WWII.
https://www.youtube.com/watch?v=uBDbbfpj7X4
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David
Sigh. The WFHS crew. Talk to me in 2 years. -
@Enuff
It is not about you winning elections for the blogmaster, it is how Barbados can transform to be competitive in the global market to sustain a decent way of life for all.
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David
Dead wrong again! The elections are due in 2027 not 2 years. My focus is on transformation not elections. I leave the election focusing to the WHS crew, Brasstacks hosts and callers, and the Nation Newspaer awardees. Get back to me in 2 years. -
Perhaps Barbados could get into AI Drones Wars Business like Colonists do
It’s the only Gig in a Cowboy Town
and the killing is growing strong“Risk” is available now
There’s a color running through your blood
Such a hasty shade of blonde
You’re that awful sort of dangerous
Kind that keeps me hanging onDarkness does appear when
I can see the secrets hangin’ ’round your neck
When we’re shirtless and slicing the wrist
Prick your finger on a kissTell no one about it
They don’t need to know
I’d chalk a line around it
If I could let you go
Keep me quiet, honey
And I promise to
Tell no one about youTrap the passion, baby, lock the trunk
Catch the keys and hit the road
Went to sleep hungover, woke up drunk
Baby shake that aspirin snowglobeDarkness does appear when
I’ll present you with a temporary fix
My accomplice, this bottomless pit
It’s ’bout as deep as it could get
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For those who feel i lie about my chair prices going up 4% but my pocket brek, please read the Carlos Forte article on the back page of Barbados Today. He explains the inflation factor in GDP better than a one door shop keeper can.
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‘NOT BUYING IT’
FORTE: FIGURES NOT PAINTING REAL PICTURE OF ECONOMY
By Emmanuel Joseph
Canada-based Barbadian economist Carlos Forte isn’t buying the Central Bank of Barbados’ glowing reviews of Barbados’ economic performance in 2023, questioning official figures which he said don’t represent the nation’s true economic health.
Forte, the Senior Economic Policy Advisor in the Canadian province of Ontario’s Ministry of Infrastructure, said the performance of the economy, reported by Governor of the Central Bank Dr Kevin Greenidge, had been blown out of proportion.
“The economy is not performing as well as the official figures would suggest,” Forte told Barbados TODAY.
Dr Greenidge declared the economy was back to pre-pandemic performance, having grown by 4.4 per cent to an unmatched value of $12.8 billion. As 2023 marked two years of solid growth and was another year of a strong showing by main breadwinner tourism, the governor predicted a repeat of this level of expansion in 2024.
But Forte is adamant that while the economy expanded last year, it did not do so by as much as reported.
From Toronto, he told Barbados TODAY: “There are some serious question marks over the official figures for inflation and the official figures for economic growth. The latter is a derivative of the former. It is very clear, in my view…the high prices over the course of the last two years…. You can appreciate that those prices are higher, there is an array of direct taxes like duties at the port…. The prices go up even without the rate being changed; the revenue take would be higher.
“They have also inflated the size of the economy because it is measured in dollars.
So, if the price levels are rising, your resulting non-GDP numbers would be higher even though production or output has markedly increased. So, I am not saying that production hasn’t increased, but my contention is that it has not to the extent that the Central Bank is reporting.
“So, do I believe that the economy has grown by 4.4 per cent last year? No, I do not.
Nevertheless, I am not pretending to be less than charitable.”
Forte contended that the Mottley administration has chosen to ignore the price effects to create a “rosier picture that they can report to the public”. He suggested the higher prices not only triggered an increase in the nominal gross domestic product but also inflated real GDP.
Forte added: “If you take a look at the appendix 6 of the same Central Bank report which has the actual absolute numbers, you will see that the foreign debt [in] December 2023, [is] almost twice as large as it was in fiscal year 2017/2018. I believe that that is not an accident, because economists besides myself have drawn attention to the fact that the government has been, over the last five years, relying more on foreign debt than domestic debt, and the foreign debt has been growing at quite a pretty sharp pace, which could have very serious implication 10, 15, 20 years down the road.”
The senior economist suggested that this is so because of what he argued, is a persistent challenge the country has had over the years earning foreign exchange.
He acknowledged that the Barbadian economy is growing but preferred to support fellow economist Professor [Justin] Robinson’s more modest assessment that the economic situation has stabilised and public finances are in reasonably good shape.
When contacted by Barbados TODAY, the central bank governor said the institution was standing by its report.Source: BT
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John 2
Sorry! I didn’t actually click on it. I thought you were engaged in your usual thing.
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If I were a wacky conspiracy theorist I would say that black lives still don’t matter even in US military garb.
If I were a wacky conspiracy theorist I would say, ” What a coincidence that three black lives were at the end of the mistake that let the missile through.
If I were a wacky conspiracy theorist I’d say that perhaps they were sacrificed in order to provide an excuse for bombing. And a means to stem the flow of black vote-bleeding in places like Chicago and New York.
But though I am wacky, I am not a conspiracy theorist. After two seconds, I require more than an emotional, angry, gut reaction to black people dying for a country that would gladly sacrifice them all.
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Barbados economy seems to go up and down, and in and out, like the waves and the tide, without any captain for the ship that has sailed.
If growth goes up or down then there should be sound explanations why it went up, or why it went down, accompanied with sound reasoning based on steps taken, or not, by Government and Business and not just the effects of global economy affecting it.
Barbados seems qualified academically at formulaic economic data number crunching, but not so hot at analyses and listening carefully to the data.
But who cares
it ain’t my F,,king moneyFade Away
[Verse 1]
He who seeks of only vanity
And no love for humanity
Shall fade away, fade away[Verse 2]
He who checks for only wealth
And not for his physical health
Shall fade away, fade away[Pre-Chorus]
Though some believe in diamonds and pearl
And feel like they’re on top of the world
They shall fade away, hear what I say[Chorus]
The rich is getting richer every day
And the little that the poor man got
It shall be taken away
Do you hear what I say?
Yeah, hear what I say[Verse 4]
The man who worships silver and gold
Shall surely, surely, surely lose his own soul
Then fade away[Verse 5]
One who’s always acting smart
And don’t carry no love in his heart
Shall fade away[Bridge]
God is here and there and everywhere
And He knows when you play the game unfair
So people beware
Or else you fade away!
Hey, beware!
Or dare you fade away?
You gotta fade, gotta fade, gotta fade now[Verse 6]
One who’s always acting smart
And forgetting to carry love in his heart
Shall fade away[Outro]
God is here and there and everywhere
And His eyes, His eyes are watching you
You gon’ fade away, yeah, yeah
You gon’ fade, fade, fade
Fade away
Fade away
Yeah, yeahRockers Music
Money Worries
Slave Master
Dread Lion
Graduation in Zion
Jah No Dead
Satta Amasa Gana
Natty Take Over -
formulaic tropes on February 3, 2024 at 10:34 AM said:
Rate ThisBarbados economy seems to go up and down, and in and out, like the waves and the tide, without any captain for the ship that has sailed.
If growth goes up or down then there should be sound explanations why it went up, or why it went down, accompanied with sound reasoning based on steps taken, or not, by Government and Business and not just the effects of global economy affecting it.
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Offshore sector.
It goes up when people have money to launder and pay a cut to GOB in taxes and then it goes down when no money to launder.
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It does not measure real output.
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“It goes up when people have money to launder and pay a cut to GOB in taxes and then it goes down when no money to launder.”
the tropes and spam man say’s he’s a clever trevor but is well stupid
in case you didn’t know..
offshore banking is about tax breaks and client confidentialitymoney laundering is about gangsters washing dirty money to bring it in the system
that’s just basic just AML, Suspicious Activity Reporting, Proceeds of Crime training
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Google offshore sector money laundering.
Here is one of the over 4 million hits!!
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I worked in offshore banking and built their client income reporting systems.
All banks have regulatory checks for money laundering.
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LOL. Quaker John appears to have found a respectable link.
https://www.telegraph.co.uk/business/2024/02/03/london-leaves-uk-behind-luxury-hotels-boom/
You can read this link if you select web capture on your drop down menu.
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President H. E. Macky Small of Senegal after a tete a tete with Ms. Mockley has decided to postpone elections in Senegal indefinitely because the electoral list is corrupted.
Wonder who corrupted it?
It was his first order of business after a state visit to Barbados.
Here is his welcome at the airport 4 days ago when he flew in on Senegal’s version of Air Force One.
Sounds like the BDF let go bare shots in the air to celebrate his visit.
I just don’t understand our fascination with the many and varied corrupt regimes of African countries.
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The parade would rival any put on in the Mother Country.
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@Enuff
The following article was written by a Nation staffer.
DEBT BILL UP
Almost $1b in repayments by end of financial year
Government will have to make about $1 billion in debt payments this financial year ending March 31.
While this is a $135.1 million increase over the $864 million in debt service in the 2022/2023 financial year, Central Bank Governor Dr Kevin Greenidge says the fact that the authorities earned a primary balance (surplus) of $493.9 million by the end of December was good news for the country’s ability to pay its debts.
He explained the importance of earning a primary balance, while noting that Government’s overall deficit of $9.1 million (0.1 per cent of the country’s gross domestic product) – so far in the 2023/2024 financial year was essentially “a balanced budget”.
“There are two balances, the primary balance and the overall fiscal balance. The primary balance is Government’s revenues minus all of Government’s expenditures except debt service; you still have to deal with that,” the Governor explained during his press conference last Wednesday to review the economy’s performance in 2023.
“And then the overall balance is revenues minus everything, including the interest payments on your debt. Anything you save on the primary [balance] that is money, it still has to go to a use and it goes to service debt.”
Greenidge reminded that when Government entered the Barbados Economic Recovery and Transformation programme, it was targeting a primary balance exceeding $300-plus million, but that amount was surpassed. It was $434.3 million last financial year.
Primary balance
He said the fact that Government had earned a primary balance of $493.9 million meant it did not have to look for all of the $999.1 million in debt service this financial year.
“Managing your fiscal [performance] is not an exact science. You have got to watch your revenues and watch your expenditures and when you come to the end of the year you might be a bit above, but it is not a bad thing,” he said.
“Here is why. The debt service [this financial year] is $999.1 million so if you have nothing on your primary [balance], you have got to go and find the money to pay the debt service. So that $493.9 million the Government saved on the primary [balance] . . . then goes to offset the payments on the debt and then Government only had to then look for the difference, which was about $500 million, for the rest of the debt.”
Greenidge added: “So it’s a good thing when you are running your primary [balance] as long as you don’t eat into anything else. It goes to pay down debt and gives you the fiscal space that you need. So, then to know if that is a good strategy, look at the overall position. The overall position basically is a balanced budget in [financial year 2023/2024] so far, 0.1 per cent.”
Higher interest payments are largely the reason Government’s debt payments are so high in 2023/2024.
The Governor said in the economic review that Government’s gross financing needs increased due to higher debt service.
“For the first nine months of financial year 2023/24, the Government’s gross financing needs increased by $90.8 million compared to the same period in the previous fiscal year. A $135.1 million rise in debt service payments primarily drove this expansion,” he stated.
Foreign expenses
“Foreign interest expenses, which constituted 65.9 per cent of this increase, significantly boosted the overall debt service costs. Importantly, a $59.5 million rise in the primary surplus effectively moderated the growth in gross financing needs.”
He added: “Interest and amortisation payments expanded during the first nine months of the fiscal year. The rise in interest on variable-rate debt and additional foreign borrowing increased foreign interest outlays by $89.1 million. In addition, domestic interest costs climbed by $32.3 million, as a result of the step-up interest rate feature of the restructured domestic bonds and the issuances of Barbados Optional Saving Scheme Plus securities. These developments increased the interest-to-revenue ratio by 5.4 percentage points, to end the period at 21.3 per cent.”
(SC)
Source: Nation
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Why in an age of information and governments promising to be transparent taxpayers are not privy to more particulars how this agreement with the PGA is structured understanding there is the standard NDA that must be in place? This is tax dollars funding the arrangement.
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David
A Nation staffer repeating what the CB said. The same CB being accused of being a liar. -
🐇/🐰
You have been hitting a good note lately.Criminals with lots of money to launder use every trick in the book to make their money look clean.
For a person to attempt to divorce offshore banking and money laundering is unbelievable.
Your point on Senegal/Macky is also a sound one. Indeed, whilst I love the greater connection between Barbados and ‘Africa’ I believe the underlying reason have not been disclosed. One day we may learn that million of Caribbean dollars is hidden in Africa and vice versa.
I see that you are mastering the art of putting one and one together.
Keep it simple and you will be ok.
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@ David,
It appears that where as in the past our governments would use NSI funds to prop up minority businesses, it has now turned to loans to subsidise minority businesses.
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Plus ça change, plus c’est la même chose. -
@David
The PGA Tour is NOT a transparent entity who rules with an iron fist. The advent of the Saudi backed LIV Tour has them now with real competition.
The PGA has been hiking admission, concessions and parking with frequency.
The value proposition becomes WHERE is the promotion occuring.
If you want great golf go watch the up and comers on the Korn Ferry tour. -
@NO
Thanks, use to follow along when Tiger Woods played at that elite level, of late no so much. It has to be millions.
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This is good for Guyana!!
…. except it has even mor corrupt politicians there than here!!
Too much money around a politician is not good.
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You are so blinkered in your contributions to the blog that you missed the fact the Exxon story was already posted.
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@enuff
Growth pains
Man on street ‘not feeling impact’ of economic gains
by CARLOS ATWELL carlosatwell@nationnews.com
BARBADOS’ ECONOMIC GAINS have come from austerity, not prosperity, says Professor Justin Robinson.
He, along with Professor Troy Lorde and businessman Eddy Abed, said the island’s macroeconomic growth may mean little to the man on the street and Barbados still had a long way to go despite the positive gains in tourism and the expected boost from the upcoming T20 Cricket World Cup.
They were reacting to last week’s review of the Barbados economy for 2023 by Central Bank Governor Dr Kevin Greenidge. He said the economy grew by 4.4 per cent last year and was in a better place than before the COVID-19 pandemic, adding: “We had two years of solid growth that has placed our economy larger than it [ever] was in the history of Barbados.”
Robinson, who is also pro vice-chancellor and principal of the University of the West Indies’ Five Islands Campus, agreed things looked bright at the macro level.
“The 2023 economic year was another good year for Barbados, certainly at the macroeconomic level, and it has certainly recovered to beyond prepandemic levels, which has led to improvements in the labour market despite some slipping back. Barbados has achieved a level of macroeconomic stability,” he said.
However, he said while Barbados was now in the second year of positive economic growth with more gains predicted to come, which he credited largely to Government’s Barbados Economic Recovery and Transformation programme, the waters became murkier further down the economic scale.
Austerity, not prosperity
“Overall, growth has been relatively weak since 2018 and what that means is those improvements in public finances have mainly come from austerity and not increased prosperity. That is where the disconnect may be between what people are feeling on the ground and the positive numbers.
“Barbadians are paying more taxes, there are more fees. The improvements in the foreign exchange reserves have mainly come due to the fact we are using a lot more foreign financing. People experience the economy in the supermarkets and labour market, but the cost of living is up due to both internal and external factors. Inflation is falling but that only means prices are rising at a lower rate,” he said.
Robinson said macroeconomic growth was important but not enough, though there were no easy answers.
Abed, speaking in today’s Barbados Business Authority (see Page 17), said the retail sector was in big trouble and he feared some enterprises might close for good this year as prices remain high.
“I have seen the Central Bank report, I have read it and I understand that from a macro perspective, the country has returned to, if not as good as 2019, perhaps even better. But at street level, we are not seeing it; the spend is definitely not back to 2019 levels,” the managing director of S. Abed & Co Ltd reported.
Abed, a former president of the Barbados Chamber of Commerce and Industry, reported there was “monstrous” competition among retailers, as evidenced by their heavy discounting – sometimes up to 90 per cent off – to attract customers.
“We sell non-essential items so after a consumer pays for electricity, puts petrol in the car and buys groceries, what’s left over, the disposable income, is less than it was in 2019. Hence, there is less for stores that sell general merchandise like mine.”
Lorde said there would always be a disconnect between the macro and micro economies, and while an upward trend on a big scale was a good thing, it would take time to affect the small scale.
“Saying things like the economy is better now than it has ever been, it is comments like that which would make people wonder about the numbers. I understand that disconnect will exist for a while; the economy would have to be doing well for a while before persons start to feel they are doing better as well.
“It’s really a pocketbook thing. That disconnect doesn’t mean the economy isn’t performing, but when it comes down to persons’ individual circumstances, if they are not getting a part of that growth such as higher salaries or lower prices – although prices don’t really go down, all that happens is the rate at which prices rise may slow down – then they would always question the numbers,” he said.
Lorde said there were several ways to explain the disconnect.
“The first is that the review addresses the macroeconomic performance of the economy while persons filter the national economy through their personal financial circumstances. Further, persons in lower income brackets are even less likely to have a positive economic assessment, despite good macroeconomic news, because of their financial precarity. Second, there is also the effect of partisan tribalism in relation to the lack of economic optimism about the state of the economy. Partisan economic perceptions also tend to be pervasive.
“Third, perceived inequality fosters a view that the rich are gaining at others’ expense, that is, one group’s economic success is coming at the expense of others. Fourth, there is the cold hard math. If persons’ incomes grow at slower rates than the overall economy, and even more specifically, the rate of inflation, they will always perceive that they are trying, and failing, to catch up.”
Source: Nation -
@enuff
It says a lot we have joined the US and other developed counties using the sale of cars (and petrol) as an indicator of economic success.
High demand for vehicle loans
by PAUL ASHBY
I100 PER CENT AGREE that the idea of the economy being positive is correct and I am seeing it being reflected in two areas.
One is the improvement in delinquency. Since last year, we have seen delinquency start to improve, more people are clearly working and so more people are able to manage their debt a lot better. There are still pockets of areas where people are challenged, but in general, we have seen a lot of improvement in delinquency.
And then, secondly, on the new business side, we still have a very high demand from people who are trying to get vehicles. Seventy per cent of what we do is vehicle financing, we are probably the largest vehicle financier in Barbados and every month we are doing increased finance of vehicles. Those are two indicators of the economic recovery.
One other indicator that I use relates to vehicles. We have two streams of that, end-of-leases and repossessions, and those numbers are significantly down.
Around the COVID-19 pandemic we had about 150 vehicles on our lot and that number came down to less than 30, at sometimes, at the end of 2023, and that 30 included both end-of-lease and repossessed vehicles. So it meant that our repossessions have come down significantly and that got also a strong indicator of the performance of the economy and we expect that to continue.
Expenses under pressure
We do also have scenarios where there are people who will come for loans who we have to decline. So the declines are still there and those declines happen because people are still having high levels of expenses, and also sometimes people may want a vehicle that is higher in value than perhaps they can afford. So there is evidence as well that expenses are under pressure still.
Although people still want to have transportation, they are doing it in circumstances where they are managing against other demands of their wallet, including increases in food costs, which you really can’t avoid.
Is there anything from a business standpoint I would like to see improved? We still have a lot of compliance that we apply to the average Barbadian which is probably overkill. Sometimes it causes a lot of documentation and work that is maybe unnecessary for the risks that you have. So we need to figure out a way based on the risk exposure, but but that’s easier said than done because when the regulator comes in they still want to see that you have all of your documentation.
We are also in the foreign exchange space and there are times when access to foreign exchange becomes really tight. The Central Bank has good reserves now so maybe there needs to be a little loosening. The two per cent fee on foreign exchange transactions is still something out there that is a cost inhibitor. I know governments don’t like to give it revenue, but that’s one that definitely could be looked at.
Paul Ashby is chief executive officer of SigniaGlobe Financial Group Inc.
Source: Nation
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@ David
The man in the street will never be able to feel growth because unlike GDP which the politicans love to qoute, his paycheck does not include the inflation facfor. You have any idea the amount of salary increase a man would have to get to put him back to where he was in real terms before Sinkyuh 10 year wage feeze? In that ten years inflation ran on average at 3%. Multiply that by 10 compunded and the man working for $1000 a month before the freeze would need rougly $1650 a month after the 10 year freeze to have the same buying power.
We will forever be playing catch up as the people get poorer in real terms yearly.
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@ David
Sorry I meant the man working for $1000 would need $1350 after the freeze to buy the same.
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@John A
Gone are the days when it was standard for employers to give two increases; cost of living and performance. This means that spending power of labour will continue to decrease.
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@ David,
This is a disturbing but very informative debate.
https://www.rt.com/shows/going-underground/591847-criminal-mafias-infiltrated-ecuadorian-government/ -
Posting crap from Russia Today is like John posting from Fox.
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What about Barbados Today!!
https://barbadostoday.bb/2023/10/10/hope-ful/
I understand there are problems with titles!!
Wonder what they could be?
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https://www.cbc.bb/news/local-news/scaife-clears-air-on-housing-project/
Sounds like GOB been using people’s lands to raise money!!
Getting interesting.
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Nation EDITORIAL
The economic disconnect
THERE APPEARS TO BE a clear disconnect between what the Central Bank of Barbados is reporting as a return to normal for the Barbados economy and what the majority of Barbadians are experiencing. This is neither the fault of Central Bank Governor Dr Kevin Greenidge nor his team of economists and analysts at the institution, but simply a lived reality for cash-strapped consumers.
When prices and taxes are high, it is hard to convince the population that things are better off for them. People will hardly pay attention to the big picture of a recovered tourism sector, expanded gross domestic product, higher foreign reserves, an increased fiscal surplus, and an economy showing resilience when their income is stretched to the maximum.
Inflation
Former Governor of the Central Bank Cleviston Haynes repeatedly advised of the dangers of chasing higher inflation with higher wages and salaries. He also cautioned against introducing price controls, saying they would be counterproductive. While public sector workers benefited from a pay hike, current Governor Greenidge has stressed the need to ensure that such increases should be linked to productivity.
Businessman Eddy Abed has pointed out that while in some cases prices increased 20 to 30 per cent, salaries did not go up by a similar amount, which means disposable income for most Barbadians has declined. Government has tried to give consumers an ease by capping Value Added Tax on fuel prices and on electricity bills for the average household. It also previously capped freight charges at the port and negotiated a price compact with the business community.
The last measure corporate Barbados, particularly retailers and wholesalers, made clear they no longer had an appetite for given its financial burden. Even with Government’s ease on electricity bills for some, the fact is that Barbadians have been paying a higher interim electricity rate to Barbados Light & Power Company Limited (BL& P). There is also no certainty on the substantive electricity rates as BL& P has taken the matter to court having been twice dissatisfied with the Fair Trading Commission’s decision on its October 2021 application for a rate increase.
Moderation
In all of these circumstances, and with the cost of living arguably their biggest concern, working class Barbadians, and indeed the under-pressure middle class, will not find solace in Greenidge’s assertion that the Barbados economy “is back”. Not when the Governor, like other members of the economics fraternity, has indicated that while prices go up, they usually do not return to their lower level even when inflation moderates.
The Central Bank’s forecast is that this moderation will happen by the end of this year and that new trade agreements with countries like Suriname and Guyana could help reduce food price inflation over the next few years. However, it also advised that the frequency and severity of adverse weather conditions in Barbados could lead to food shortages and escalate food price inflation.
Source: Nation
There is also the risk from the ongoing Russia-Ukraine war, escalating conflicts in the Red Sea region, and continued congestion in the Panama Canal. All of this points to continued price pains for Barbadians.
When prices and taxes are high, it is hard to convince the population that things are better off for them.
The blogmaster invites you to join the discussion.