BRIDGETOWN, Barbados: Central Bank Governor Dr. Marion Williams says the global recession continues to restrict the nation’s economic growth and will do so for the rest of the year.
“Declining tourist arrivals, in particular, triggered reduced activity in both the traded as well as the non-traded sectors and led to a 4.4 per cent decline in real GDP and a concurrent rise in unemployment,” she said last week while presenting her final review as the bank’s governor.
Dr. Williams, who will take up a diplomatic post in January, said while figures suggesting economic recovery among Barbados’ main trading partners will be modest, growth is likely to continue on a negative path for the rest of 2009.
“The baseline scenario contemplated by the Bank is a decline of roughly four per cent by year-end, with a possible recovery late in 2010,” Williams said.
In her review of the performance of the nation’s various sectors, Williams said the tourism sector continued to bear the brunt of a still fragile global economy. The indirect effects of the slump in tourism activity were most reflected in the non-traded sectors, particularly wholesale and retail and transportation, storage and communications, where output fell by 2.6 per cent and 2.7 per cent, respectively.
The agriculture sector experienced positive growth, with the sugar industry expanding by 1.2 per cent and the non-sugar agriculture by 1.7 per cent. However, the manufacturing sector plummeted by 11.8 per cent.
The slowdown in overall economic activity had a negative impact on employment levels. The unemployment rate at the end of June was 9.9 per cent, compared to 8.6 per cent at the same time last year.
“The greatest concentrations of job losses were experienced in the construction and quarrying, transportation and communication and general services sectors,” Williams said.
Williams said the average rate of unemployment should continue to rise due to the construction sector struggling and negative growth predictions for sectors that provide ancillary services to the tourism sector.
However, Williams is urging the government and private sector to keep up efforts to maintain jobs.
“I think that as long as you can keep people employed, you will keep businesses open and if you keep businesses open you will register some kind of growth or at least you will mitigate the decline in economic activity,” Williams said. “When unemployment starts to get to uncomfortably high levels, then it affects output, it affects the performance of every sector…”