Barbados: ‘Cautious optimism’ for economic recovery

By added on 29/09/2011

While there are a few bright spots in the area of economic recovery in Barbados and the Caribbean, it is anticipated that growth will remain subdued and at levels below those projected prior to the global economic meltdown, reports the Barbados Advocate.

This view has been expressed by Rosamund Edwards, Governor of the World Bank and the International Monetary Fund for Dominica. She spoke at the just-concluded World bank IMF joint annual meeting in Washington D.C. on behalf of the Joint Caribbean Group that includes CARICOM countries.

“Moderate prospects for tourism and remittances inflows owing to weaknesses in the United States and our European trading partners explain largely this cautious optimism,” said Ms. Edwards.

She said that additionally, foreign direct investments are projected to increase only timidly.

“However, a good development for some countries is that commodities exports are expected to register a strong uplift due to recovering prices and global demand,” the official remarked.

However, this poses mounting inflationary and external payments pressures for others in the region, Ms. Edward stated. Most of the economies in the Caribbean were hit hard by the global recession which unfolded in 2008.

Edwards told the meeting that Caribbean countries continue to be heavily impacted by the vulnerabilities in advanced countries and spillovers from the persistent uncertainty in global financial markets.

“We therefore support concerted multilateral efforts to nurture the recovery through policies that bolster private sector confidence and enhance financial sector resilience,” she declared.

Islands whose economies are dominated by tourism felt the full impact of the crisis as there were slowdown in visitor arrivals from the USA and the UK, the two major markets for visitors to this region.

However, these economies have since been recovering, showing improved GDP growth buoyed by higher visitor arrivals.

The World Bank-IMF official said that a well-defined strategy to boost economic growth and to stimulate employment is very vital for regional countries. “As we renew our efforts to rebuild policy buffers and to reduce debt, we are therefore seeking out space within our budgetary envelopes to sustain growth-promoting investments,” Edwards said.

“Furthermore, we are committed to pursuing and strengthening initiatives to diversify export markets, increase workforce productivity and enhance competitiveness,” she added.

Several Caribbean countries including Barbados joined with the international community in attending the annual meeting of the two Washington D.C.-based financial institutions. Issues such as an assessment of the status of the global economy; economic recovery, especially in the United States and Europe, and the implications for emerging economies formed the core of the deliberation.