Economic Growth in Barbados: Central Bank Stands by 4.5% Estimate, Ensures Transparency in Data Reporting

The Central Bank is confident that the economy grew by 4.5 per cent in the first half of the year based on data from the Barbados Statistical Service (BSS) and other sources.

Central Bank officials are also assuring Barbadians that “there is no intent to manipulate or distort economic data”, and said that the institution “will continue to refine our models and methodologies, ensuring that the Central Bank remains a trusted source of clear and accurate economic information”.

The country’s monetary authority made this clear yesterday as it responded to a statement from Canada-based Barbadian economist Carlos Forte, who questioned aspects of the Central Bank’s half-year report, including the economic growth figure and the tourism industry’s performance.

The Central Bank reiterated that it stands by its economic reviews.

“The bank recognises the critical role that accurate, transparent, and objective economic reporting plays in maintaining public confidence, and takes considerable care to ensure that the information we publish is both reliable and reflective of current economic realities,” it said.

“The economic data, including statistics on economic growth, nominal GDP, inflation, and unemployment, are produced following best practices. While the BSS is responsible for producing much of this data, we rigorously interrogate their submissions to ensure thoroughness and reliability.”

It added: “Our reports are grounded in robust statistical frameworks, supported by rigorous analysis, and are frequently reviewed by international partners such as the International Monetary Fund (IMF) to ensure accuracy.

“The 2023 GDP estimates, produced by the BSS and reported by the Central Bank, have been reviewed and validated by an IMF technical assistance mission. This external review provides additional assurance of the validity of our data, which we stand by confidently.”

Turning to specific concerns Forte raised about the bank’s estimates of tourism earnings and their contribution to GDP, the Central Bank said that “the estimated performance of tourism earnings in the first half of 2024 is comparable to that of the first half of 2007, a period when Barbados also hosted a major international cricket event”.

“In both instances, we observed a significant increase in the ratio of tourism earnings to gross domestic product – rising from 15.9 per cent in 2023 to 20.9 per cent in 2024. This is consistent with the increase observed from 22.7 per cent to 27.5 per cent between 2006 and 2007,” the monetary authority explained.

The bank said that tourism estimates for the first half of 2024 are supported by several key indicators. This included BSS data showing that long-stay arrivals increased by 17.9 per cent over the first half of 2023 and cruise arrivals recorded a 17.9 per cent increase, with cruise calls rebounding significantly in the second quarter of 2024.

The bank also said that food prices experienced a general increase of 5.3 per cent, indicating that visitors paid more for food, contributing to higher tourism spending.

This was in addition to information from Smith Travel Report, which stated that hotel room rates “rose by an average of ten per cent, with the second quarter showing a particularly strong increase of 13.3 per cent over the second quarter of 2023”.

“These data points collectively underpin our estimate of a 4.5 per cent economic growth rate for the first half of 2024. We remain confident in our assessment, which reflects a strong recovery in the tourism sector post-COVID, driving economic expansion across other sectors,” the bank said.

It also acknowledged the concerns raised by some Barbadians regarding the perceived disconnect between the economic reports and the actual conditions they experience.

“It is important to understand that while the economy may be growing, it can take time for the benefits of this growth to be felt by every member of society – a phenomenon observed globally, including in advanced economies like the United States,” said the bank.

“This is why we have consistently emphasised in our economic reviews the need for increased investments to achieve sustainable and inclusive economic growth that will improve the lives and livelihoods of all Barbadians.” (SC)