Economic Adjustment In Barbados: Examples From Successful Countries

BRIDGETOWN, Barbados – In his most recent economic letter – Dr. DeLisle Worrell, past Governor of the Central Bank of Barbados – looks at lessons learned from four countries that were hit hard by the 2008 financial crisis, and how they managed to restore growth and maintained high human development throughout the adjustment period.

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Barbados Budget 2017 At A Glance

BRIDGETOWN, Barbados – The Hon. Christopher Sinckler, Minister of Finance and Economic Affairs, has delivered his long-awaited Financial Statement and Budgetary Proposals today. You can download a copy of the document here (PDF, 58 pages).

Barbados Budget 2017 At A Glance:

Revenue Measures (BDS):

  • National Social Responsibility Levy – Introduced in September 2016 at 2%, to be increased to 10% effective July 1 2017- $218m.
  • Commission on Foreign Exchange Transactions – Effective July 1, a foreign exchange commission charged on all sales of of foreign currency of 2%. (extending to wire transfers, credit card transactions, and OTC sale of foreign currencies) – $52m.
  • Excise on Gasoline and Diesel Fuels – Effective June 1, excise tax on gasoline will be increased by 25 cents per litre from $0.74 to $0.99 and on diesel by $0.24 from $0.20 to $0.44. June 2017  retail prices will now be: Gasoline $3.05 per litre and Diesel $2.25 per litre (current prices are $3.00 and $2.15 respectively) – $50m.
  • BNTCL sale – $70m.
  • Government stake in Hilton Hotel sale – $100m.

Expenditure Measures:

  • Interest rate savings on domestic debt held by statutory corporations – $70m.
  • Savings in overall expenditure will be identified – $82m.

Other Measures:

  • Tax Amnesty for 6 months – $25m.

Past Governor Of Central Bank: Productivity Lessons From Singapore

BRIDGETOWN, Barbados – In his most recent economic letter – Dr. DeLisle Worrell, immediate past Governor of the Central Bank of Barbados – looks at productivity lessons from Singapore, a country which has been compared and contrasted to Barbados from a development standpoint.

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IMF Outlook: Some Growth For The Caribbean 2017 2018, But Risks Remain

The International Monetary Fund (IMF) released their April 2017 regional economic outlook for the western hemisphere a few hours ago.

Highlights:

Caribbean economies dependent on tourism and commodity exports are projected to grow between 1.5 and 3% between 2017 and 2018.

Several islands (Grenada, Jamaica and St. Vincent and the Grenadines) enjoyed strong growth in tourism in 2016 due to increased arrivals in stopover and cruise segments. Trend expected to continue in 2017 driven by economic growth in the U.S. (the primary market for most destinations in the region, with the exception of Barbados which relies on the U.K.).

Commodity exporters, including Trinidad and Suriname, were hit by lower commodity prices in 2015 and 2016, and are projected to return to positive growth in 2017 and 2018, benefiting from higher (though still low) commodity prices.

Public sector debt remains a major vulnerability. Several tourism dependent economies have seen their public-debt-to-GDP ratio decline from very high levels, with several countries (Grenada, Jamaica, St. Kitts and Nevis), engaged in fiscal consolidation programmes. In Barbados and Belize, public debt has increased in recent years and fiscal consolidation and structural reform is needed.

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Source: International Monetary Fund

IMF Completes Final Review Of Grenada Extended Credit Facility

ST. GEORGE’S, Grenada – The International Monetary Fund (IMF) has completed their final review of the island’s performance under a programme supported by a three year arrangement under the Extended Credit Facility (ECF)

According to The Fund:

The Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payments problems. The ECF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis. The ECF is the Fund’s main tool for providing medium-term support to LICs.

The completion of the review allows for final disbursement of US$2.8m, for a total of US$19.4m, since the arrangement was approved in June 2014.

The island has successfully met targets, including fiscal adjustment and debt reduction. The economy also grew by around 3.9% in 2016 thanks to construction activities and tourism services.

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Source: International Monetary Fund