Barbados economy contracts 0.4% during first quarter of 2013

The Central Bank of Barbados Tuesday said that the local economy contracted by 0.4 percent in the first three months of 2013 and urged the authorities to put “back on track” the fiscal consolidation strategy as well as a new medium term adjustment strategy to turn around the island’s economic fortunes.

In its review of the Barbados economic performance fore the first quarter of this year, the Central bank said that on current trends there may be no real increase in the contribution to gross domestic product (GDP) from the tourism or international business sectors in 2013.

It said that the the forecasts for the rest of the economy are no better, with overall GDP expected to be virtually flat. “In order to sustain foreign reserves at end 2012 levels, net capital inflows of about BDS$523 million (US$261.5 million) will be needed, for both the private sector and Government. This compares with the net inflow of BDS$682 million (US$ 341 million) achieved in 2012.”

The Central bank said that investment currently underway or recently completed in increasing capacity in the luxury tourism segment, and enriching the visitor experience, are elements in the foundation for growth of the economy in 2014 and beyond.

But it said that more investment is needed, covering specialist niches such as eco, sports and cultural tourism, as well as to cater for the more discriminating middle income visitor, who values the distinctive Barbadian experience. -(CMC)