Barbados’ 2017 Six Months Economic Performance Labeled as ‘Uneven’

Acting Governor of the Central Bank, Cleviston Haynes

The Barbados economy registered an uneven performance during the first half of the year. Preliminary data suggest that the expansion in real economic output continued into the second quarter, primarily reflecting sustained growth in tourism activity. The fiscal deficit narrowed moderately in the first quarter of fiscal year (FY) 2017/18, partially the result of the fiscal consolidation measures implemented in the previous fiscal year. However, the stock of international reserves fell below 10 weeks of import cover, owing in part to expected external debt service obligations and the on-going delays in securing planned foreign investment inflows. The context for this outturn is that the Barbados economy has underperformed in the aftermath of the global financial crisis, as evidenced by low growth and significant fiscal and external imbalances. The Government of Barbados has, particularly since 2013, sought to contain the fiscal deficit through a range of tax and expenditure measures, but the fiscal deficit has remained stubbornly high. Over the three preceding fiscal years, the fiscal deficit has been out of line with available financing as access to financing on the domestic and international capital markets weakened, resulting in a sharp increase in accommodation from the Central Bank.

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97 Comments on “Barbados’ 2017 Six Months Economic Performance Labeled as ‘Uneven’”

  1. David August 15, 2017 at 2:32 PM #

    This IMF press release is useful to the discussion because it confirms what we simpleton know read how a protracted deficit will impact an economy like Barbados given its configuration.

    https://www.imf.org/en/News/Articles/2017/06/29/pr17255-imf-staff-concludes-visit-to-barbados

    Like

  2. millertheanunnaki August 15, 2017 at 2:50 PM #

    @ Tron August 15, 2017 at 10:52 AM
    “If the structural deficit remains, the BBD will devalue sooner or later to a level which balances low work efficiency and high demand for foreign goods.”

    That is one argument on which we have always been totally congruent.

    All the variables are in a fine matrix of coalescence to ensure such an outcome within a timeframe which can now be specified with a massive degree of accuracy and a 99% confidence level.

    Given the sustained plummeting trajectory of the foreign exchange reserves matched only by similar loss of foreign investor confidence in the Bajan economy there is no way the Bajan dollar can lose the race in its hell-bent drive to become the biggest Mickey mouse currency in the region.

    Not even a politically-contrived announcement of an imaginary find of billions of barrels of hydrocarbon reserves off Barbados can stop the Bajan Bolt economy from finishing with flying colours.

    The Bajan economy must first hit rock bottom before there can be any serious attempts of resuscitation.

    Before any attempts of recovery can be effective, like an alcoholic in need of help, the managers must first not only confess that they are in need of serious help but must also swallow the necessary medicine of making the Bajan dollar seek its true value in the financial world and the people earn their keep by the sweat of their improved productivity brow to pay for their conspicuously opulent unsustainable materialistic lifestyle.

    How in the world of financial tarnation can a Bajan dollar be worth US $0.50 and the good or service on offer to visitors for that 50 greenback cents is worth not even Jamaican $ 20.00?

    Only divine intervention by a financial spectre in the form of the invasive surgeon Dr. IMF can put a stop to the current madness passing for fiscal and monetary management of the Bajan economy.

    Like

  3. Hal Austin August 15, 2017 at 3:09 PM #

    David,
    You always try to go to the ‘authorities’ to convince your self that you are right. You have a thing about seeking the approval of your betters.
    I will give the example of Euclidian geometry, which ruled mathematics for hundreds of years, until it was over-turned with new ideas. So that you understand @David, a fiscal deficit is caused when the revenue authorities spend more than they earn. Simple.
    Part of our problem is pegging to the Greenback, as I| have said before. We should decouple from the US dollar, and peg to a basket of currencies and commodities.
    For over 15 years, from July 2011 to December 2016, the Greenback (ie the Bajan) appreciated by 35 per cent and our central bank and ministry of finance remained like foxes trapped in lights. They are not the only ones; we have had a professor of economics writing in the Nation who found it difficult explain the primary role of foreign reserves. You could no make it up.
    The IMF itself has said “reducing government debt is likely to raise output, as real interest rates decline and the lighter burden of interest payments permits cuts to distortionary taxes.”
    @David, the IMF has been wrong in the recent past, don’t just follow them: The Washington Consensus, Olivier Blanchard’s mea culpa, over that shift in the intellectual paradigm.
    Have a look at the Plaza Accord and the debate leading up to it; look at post 2007/8 quantitative easing.
    Debate is about ideas: Krugman vs Reinhart/Rogoff, for example. We have just had a lost decade of economic policy because of the almost religious following of market fundamentalism, that the market is always right..
    In Barbados our public economic conversation is dominated by post-war Bretton Woods ideas that have already been rejected by their founders. This became unfashionable decades ago.
    Look at the simple historical chronology and you will see the change: Nixon abandoning the gold standard in 1971 (some of us older people will remember when the British pound was pegged at Bds$4.80 per £. Now it fluctuates); the oil crisis of 1973; the birth of currency derivatives; the 1980s and deregulation; the dot.com crisis at the turn of the century; 2007/8 – all these crises led to further shifts in the paradigm.
    When I want to go down memory lane I talk to my 90 yr old uncle, or 93 yr old mother in law. But if you want to run a modern economy (and not the nonsense about a small open economy), you reach for the cutting edge of macro-economics.

    Like

  4. millertheanunnaki August 15, 2017 at 3:18 PM #

    @ Hal Austin August 15, 2017 at 2:22 PM
    “Part of the problem is having book-keepers, however respectable, pretending to be macro-economists”

    Cheers, mate! Good analogy there Hal!

    How about one comparing a topnotch investigative crime sleuth journalist with that of a finance-trained reporter attached to the backroom of the Daily Mail as a show of being an UK equal opportunity employer to meet multicultural targets?

    The problem with your analogy is that “book-keepers” record and report on real outcomes in the world of finance and real business whereas “macro-economists” (like you and your “no-need-for-foreign-exchange-reserves” thesis) postulate on imaginary esoteric events like astrologists.

    Maybe you should compare macro-economists to priests who pray to some great healer in the sky for the healing of the sick whereas book-keepers are more like physicians who live in the real world and use ‘science’ and ‘practical’ knowledge to ease the pain of the sick.

    Like

  5. Bush Tea August 15, 2017 at 3:50 PM #

    Oh Shiite now!!!
    Hal Austin is an economic guru!!!

    Murder!!!

    Once Bushie was asked to give a lecture to some young children – something the bushman is hesitant to do —cause children don’t mek sport…

    At the VERY outset, a little fellow ask ..point blank …..
    Sir, are you rich?
    …cause otherwise we going back and play cricket….
    we really don’t want to hear any ‘poor talk’ – teacher does that all day long.

    (Wink @ Hants … this is one time the ‘ride’ came in handy… 🙂 )

    Bushie said that to say that – Hal should not be pontificating on matters of wealth or economic management…..
    Steupsss..
    Bushie going back to play cricket ……

    Like

  6. Vincent Haynes August 15, 2017 at 4:06 PM #

    Stephen not optimistic about economic recovery | Barbados Today
    Stephen not optimistic about economic recovery
    The writing had been on the wall for the Barbados economy for some time, and Government should have taken the necessary steps to avoid the current situation, says economist Jeremy Stephen. And he is…
    barbadostoday.bb
    https://www.barbadostoday.bb/2017/08/15/stephen-not-optimistic-about-economic-recovery/

    Like

  7. chad99999 August 15, 2017 at 4:32 PM #

    Malcolm X was the LEADING official spokesman for the Nation of Islam from about 1955 to 1966

    The official ideology of the NOI is well known. It is summarized in Wikipedia as follows:

    “The original peoples of the world were black. White people are a race of “devils” created by a scientist named Yakub (the Biblical and Qur’anic Jacob) on the Greek island of Patmos. Whites have a culture of lies and murder that Yakub instituted on the island to ensure the creation of his new people. Yakub established a secret eugenics policy among the ruling class on Patmos. This policy encouraged a general preference for light skin. This process took approximately 600 years to produce a blond-haired, blue-eyed group of people. As they migrated into the mainland, they were greeted and welcomed by the indigenous people wherever they went. This is when the ruling class of the Middle East decided to round up all the troublemakers they could find and march them out, over the hot desert sands, into the caves and hillsides of Europe. The savage ways of white people came from living in the caves and hillsides of Europe for over 2,000 years without divine revelation or knowledge of civilization.The white man is “Yacub’s grafted Devil” and “the Skunk of the planet Earth”.

    Like

  8. Vincent Haynes August 15, 2017 at 4:41 PM #

    Chad 9 of 5

    Chuckle……yuh pon de wrong site…..carry yuh drivell where it belong.

    Like

  9. Artax August 15, 2017 at 8:03 PM #

    I wrote ONE of the contributing factors to the depletion of the foreign reserves is the fiscal deficit…. Then I went on to EXPLAIN why I mentioned it.

    Hal Austin took one point, without considering the entire contribution to be senselessly and sarcastically critical. I cannot believe that he was ever a journalist, because he lacks the basic prerequisite of a journalism, which is the ability to read and understand……. i.e. comprehension.

    The new title nowadays for INSURANCE SALESMEN is “FINANCIAL ADVISOR.” Hal Austin was probably an insurance salesman who pursued a few courses in journalism and now calls himself a “financial journalist.” After all, he won the Association of British Insurers’ Lifetime Achievement award in 2008.

    Similarly, “part of the problem is having insurance salesmen, pretending to be financial advisors and macro-economists.”

    I also read a few of Hal Austin’s articles………… and one thing for sure, he is consistently critical of others and very sarcastic. “Big Society, Small Thinking” readily comes to mind, in which he also regurgitates his trade mark: “Since the 1960s, leading economists up until now have been preaching the same thing.”

    Like

  10. Artax August 15, 2017 at 8:28 PM #

    I had enough information on Hal Austin to continue posting “hard hitting” contributions about him. He is not the type of individual you would immediately become fond of.

    However, after reading information which suggests Hal Austin left Combermere 54 years ago……… in 1963 (before I was born). Assuming he left school at 17 or 18 years old, he has to be about 71 or 72 years old now.

    Although the older folk say: “Age doesn’t make you a man,” I am appalled that a man of his age, who boasts of so many achievements, could EXHIBIT such CHILDISH and DISRESPECTFUL behavior in this forum.

    Old age comes with many fears and perhaps the thought of aging presents Hal Austin with the reality that he may become irrelevant. That’s probably the reason why he uses this forum to “authoritatively demonstrate” to us “lesser mortals” that he “still has it.”

    Read: “Hal Austin August 12, 2017 at 5:49 PM,” in which he was EXTREMELY DISRESPECTFUL to David BU.

    I decided that I should be the one to “man up.”

    My parents taught me to respect my elders………… Hence, because of Hal Austin’s age (NOT his attitude), rather than continuing in a “tit for tat,” I believe I should IGNORE his childish criticisms and endeavour to be a bit more RESPECTFUL towards him in the future.

    And I also suggest that at his age, Hal Austin should be thankful to God, and rather than being sarcastic, arrogant, sanctimonious, condescending, adversarial and exhibiting all the other characteristics symptomatic of narcissism, he should be a bit more tolerant and respectful of others and their opinions, while discussing, in a cordial manner, how they may have erred.

    Like

  11. Hal Austin August 16, 2017 at 2:55 AM #

    Artax,
    I will ignore your fiction, with one exception. I have never worked for an insurance company as a salesman, driver, clerk or in any position. In manufacturing a story to give the impression you know me, plse take in to consideration those many decent people who work in insurance companies.
    I have been a consumer of insurance products.

    Like

  12. Artax August 16, 2017 at 7:35 AM #

    Hal Austin

    It is CLEAR you have a problem with COMPREHENSION.

    Could you please indicate where in my comment I made any statement that proves your statement re: “manufacturing a story to give the impression you know me?”

    Let me break it down for you Mr. Pulitzer Prize Journalist: English Language 101:

    “The new title nowadays for INSURANCE SALESMEN is “FINANCIAL ADVISOR.”

    Check with anyone in the insurance industry….. the new title for insurance salesmen is “financial advisor.” Juxtapose your mentioning being a “financial advisor” to the above statement and you would realize the PUN.

    In other words I exploited the different possible meanings of “financial advisor” to make a sarcastic joke.
    +++++++++++++++++++++++++++++++++++++++

    “Hal Austin WAS PROBABLY an insurance salesman who pursued a few courses in journalism and now calls himself a financial journalist.”

    By using the phrase “WAS PROBABLY” I was purposely being speculative……. my comment was based on CONJECTURE rather than KNOWLEDGE.
    ++++++++++++++++++++++++++++++++++++++++

    “After all, he won the Association of British Insurers’ Lifetime Achievement award in 2008.”

    I “thoughte I wolde amenden al the jape” (you may have read Chaucer’s “the Miller’s Tale)”, by including the above statement.
    ++++++++++++++++++++++++++++++++++++++++

    Hal Austin, as the older folk would say: “you can give, but you can’t take.”

    My 8 year old son behaves more maturely than you.

    Like

  13. Hal Austin August 16, 2017 at 9:33 AM #

    Artax,

    I am not surprised you are operating under a nom de plume. You made a hypothetical and I clarified it. Your anger and aggression would not intimidate me. I will challenge you at every step at the risk of boring other readers.
    Just to improve your ignorance, an insurance salesman works for the company, a financial adviser works for the client. There is a legal difference, but then again you knew that. As to your knowledge of grammar I leave you to sort that out.

    Like

  14. Artax August 16, 2017 at 10:41 AM #

    Hal Austin

    There is none other in this forum who exhibits “anger and aggression more than you.” One just has to read all your contributions, which, more often than not, are filled with sarcastic and pejorative statements, rather than information we can learn from. Your responses to David BU are perfect examples.

    And that is all you bring to Barbados Underground…….. sarcasm, anger and aggression.

    Men don’t engage in “having outs” and “holding up theirs skirt to block, cuss and insult their “enemies.” Women usually engage in that activity.

    Hal Austin, based on your behaviour, which cannot be attributed to manhood, my “knowledge of grammar” does not prevent me from suspecting that you are a homosexual.

    You may have the last word.

    Like

  15. Hal Austin August 16, 2017 at 10:52 AM #

    Artax,
    You are also sexist and homophobic. I am sure I am also a mugger. Next time I will claim that the fiscal deficit is a main cause of the declining foreign reserves and claim Marla Dukharan as my source. You may hide behind your mask to be offensive, but as promised, I am not going to let you get away with a single word. You are a verbal thug. Decent people must stand up to the loud mouths, the Bajan Trumps.

    Like

  16. Artax August 16, 2017 at 11:14 AM #

    See wuh I tell yuh… you can’t help it… you had to reply because you like uh “having out”… proves my point!!!

    You are a homosexual…. men don’t behave like you.

    I guess you using your “real name” to be offensive make it right.

    As I mentioned, I went on to explain why I stated it….. which you refuse to mention so as to fulfill your stupid agenda.

    You cannot intimidate me………. and I would do likewise to you.

    Like

  17. Artax August 16, 2017 at 11:15 AM #

    Hal Austin is a duncy boy (girl) who got kicked out of Combermere when he was in second form

    Like

  18. Artax August 16, 2017 at 11:16 AM #

    Only a buller would focus on another man, rather than focus on the topics presented to BU for discussion….

    Like

  19. Hal Austin August 16, 2017 at 11:21 AM #

    Nice to see you are in the gutter. I am still keen on finding out how the fiscal deficit is mainly responsible for the decline in foreign reserves – or is this a male thing?

    Like

  20. Artax August 16, 2017 at 11:23 AM #

    The below contribution was written by a man (woman) who accused me of being a “verbal thug.” And I’m sure anyone would agree he went into the gutter.

    +++++++++++++++++++++++++++++

    Hal Austin August 12, 2017 at 5:49 PM #

    David,

    I am used to your economic illiteracy. But trying to prevent people from even debating the issues goes right to the heart of your buffoonery. The obsession with foreign exchange was prominent in 1960s economics.

    @David, have you ever read a book, far less economic history. You are just using your toy to enforce the ignorance that pervades your little world. That is why what passes for public debate is the regurgitation of old ideas. If you do not know shut up, and go and learn.

    Your parasitic and deferential dependence on what the governor of the central bank has said is all the evidence we need of your economic knowledge. If you do not know just say so, or preferably keep quiet. Don’t open your ‘mouth’ and show you are a buffoon.

    How do most of the world’s leading companies settle their foreign currency obligations? How do companies in manufacturing buy products in advance ie soft drink and beer manufacturers? Do they stockpile US dollars to pay their orders or store them in a big warehouse?

    By the way, don’t call anyone an idiot. You are the classic example of one.

    Like

  21. Artax August 16, 2017 at 11:27 AM #

    And I will maintain my point that ONE of the reasons for the depletion of the foreign reserves is the fiscal deficit.

    Like

  22. Artax August 16, 2017 at 11:28 AM #

    The onus is on you to prove me wrong!!!

    Like

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