(Barbados Nation) Barbados’ economy is in deep trouble and the Central Bank’s latest report is signalling more worry about the falling level of vital foreign reserves.
In its review of the country’s economic performance in the first half of 2013, the Central Bank revealed that the economy did not grow but contracted by 0.6 per cent.
The bank explained that not only did the sectors relied on heavily to generate foreign exchange – tourism and international business and financial services – fail to thrive, but there was a significant drop in foreign reserves during April, May and June.
“The foreign reserve cover fell from 19 weeks of imports as at March to 16 weeks at the end of June,” the bank reported the same day that the country was spared damage from Tropical Storm Chantal which appeared ominously threatening. However, there was no reprieve in the economic score card from the Central Bank as it revealed a litany of obstacles blocking recovery after nearly six years of weak or no growth.
“Following a lackluster performance during the peak winter season, the tourist industry continued to underperform as tourism output declined by an estimated 1.4 per cent for the first half of 2013.
“Total long-stay arrivals fell by seven per cent during the first six months, marking the second consecutive January to June visitor decline.
Arrivals from the United States dipped by 11 per cent, a reflection of the cancellation of flights originating from the Dallas gateway in August 2012,” the Central Bank told Barbadians.
In a statement released in the afternoon, the bank said: “The number of new licences issued to international business and financial services entities increased by eight per cent up to May, but renewals fell by 14 per cent.”
Barbados’ exports of rum fell by 37 per cent; sugar production was down 29 per cent, while activity in the construction sector declined by an estimated nine per cent, the Central Bank reported.
In financial services, the sector remained very liquid with high levels of deposits but the Central Bank reported that an increasing number of Barbadians were not servicing loans in a timely manner, though there was no increase in loan levels.