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Barbadian Economy Continues Recovery With Stronger Tourism Performance, Improving Public Finances A Critical Challenge – IMF

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8 years ago

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End-of-Mission press release include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

  • The Barbadian economy continues its recovery on the back of stronger tourism performance but improving public finances remains a critical challenge
  • Economic growth in 2016 is estimated to have been 1.6 percent and to have accelerated in the first quarter of 2017 to 2 percent.
  • The IMF stands ready to assist the government of Barbados through continued policy dialogue and technical assistance.

At the invitation of the authorities, an International Monetary Fund (IMF) team led by Judith Gold visited Barbados from June 20–29 to review recent economic developments and discuss the 2017 budget. At the end of the visit, Ms. Gold issued the following statement:

“The Barbadian economy continues its recovery on the back of stronger tourism performance, but improving public finances remains a critical challenge. Economic growth in 2016 is estimated to have been 1.6 percent and to have accelerated in the first quarter of 2017 to 2 percent. The stronger economic performance has supported a reduction in the unemployment rate to 9.7 percent in 2016 from 11.3 percent in 2015. Inflation started to pick up in the second half of 2016 after deflation in 2015, and on a point-to-point basis reached 3.2 percent by end-December 2016 mainly due to higher food prices.

“The current account has further narrowed by 2 percentage points to 4.5 percent of GDP on the back of improved tourism receipts, a robust increase in exports, and low oil prices. Notwithstanding this improvement, international reserves fell to B$682 million by end-2016, about 2 months of imports. Delayed official loan disbursements and privatization, as well as lower private-sector inflows, were key drivers of this decline. Net International reserves remain relatively low.

“There was some progress in reducing the fiscal deficit in FY2016/17, which is estimated to have declined to 5.5 percent of GDP from 6.8 percent in FY2015/16. The majority of the adjustment was generated by lower government spending, while fiscal revenues held steady. Despite this progress, the large government financing requirements were a challenge, as banks reduced their sovereign exposure. As a result, the government had to increasingly resort to funding from the Central Bank of Barbados (CBB).

“Growth in 2017 is projected to slow to less than 1 percent, reflecting the fiscal consolidation efforts introduced in the FY2017/18 Budget. Inflation is expected to continue to accelerate to 6.7 percent by year end because of the increase in the National Social Responsibility Levy (NSRL) and other taxes and fees, but revert to more historical norm in 2018 and subsequent years. There are important downside risks related to the increase in domestic and global uncertainty, including the impact of the Brexit on the British pound.

“Continued fiscal discipline, with economic growth, are essential to securing Barbados’ future. They will be critical to bolster international reserves and support the currency peg. Only a substantial and a sustained reduction in the fiscal deficit, which will put the debt-to-GDP ratio on a solid downward path, will restore the country’s credit rating and attractiveness to investors.

“The May 30th budget accelerates the pace of adjustment. It seeks to address the fundamental imbalance between revenues and expenditures that has characterized Barbados’ public finances in the past decade, and to significantly reduce new funding requirements. The budget is primarily focused on raising revenues while shoring up international reserves, including through an increase in the NSRL—which mostly impacts imported goods—from 2 percent to 10 percent. The government also plans cuts in current expenditure, to complete ongoing privatization efforts, and to undertake new divestments. In addition, the government seeks to initiate a voluntary exchange of debt instruments with the National Insurance Scheme and the CBB to reduce the interest bill. If implemented as envisaged, the 2017 budget would lead to substantial gains toward improving public finances.

“Over the medium-term, further fiscal adjustment would be needed on the expenditure side to decisively reduce debt and debt service costs. Transfers to public enterprises of close to 8 percent on an annual basis represent the second largest expenditure item, after the wage bill, and about the same magnitude as the interest bill on the public debt. Both expenditure categories weigh heavily on public finances and critical reforms are needed over the to restore sustainability and confidence. Reduction in transfers to public enterprises must be supported by structural reforms to reduce SOEs’ operating costs, rationalize their programs, and raise their revenues. Consideration should also be given to divesting commercial SOEs that can be run more efficiently and profitably by the private sector. Other structural reform, especially those focused on improving the investment climate and fostering growth are also critical.

“The IMF stands ready to assist the Government of Barbados, including through continued policy dialogue and technical assistance. The team would like to thank the authorities, technical staff, representatives of civil society, and the private sector, for their open discussions and constructive dialogue.”

The mission met with Minister of Finance and Economic Affairs Christopher Sinckler, Minister of Industry, International Business, Commerce, and Small Business Development Donville Inniss. Acting Central Bank Governor Cleviston Haynes, the leader of the opposition Mia Mottley, senior government officials, and representatives of the private sector.

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GCT Exemption Threshold for MSMEs Increased to JA$15 Million

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2 weeks ago

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March 16, 2025

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The Government of Jamaica has announced an increase in the General Consumption Tax (GCT) exemption threshold from $10 million to $15 million for micro, small and medium-sized enterprises (MSMEs).

Minister of Finance and the Public Service, Hon. Fayval Williams, in opening the 2025/26 Budget Debate in the House of Representatives on March 11, said the change is aimed at supporting the growth and development of small businesses.

Mrs. Williams said the latest figures from the Small Business Association of Jamaica (SBAJ) show that there are an estimated 422,000 registered small businesses in Jamaica, generating 80 per cent of the jobs in the Jamaican economy.

“This means 1,136,240 persons in our workforce are employed by MSMEs,” the Finance Minister noted.

In addition, the Minister said the Government has allocated $2 billion to support MSMEs.

“[The sum of] $2 billion is in the Budget for the Development Bank of Jamaica (DBJ) to allow them to continue to facilitate sustainable growth of start-ups and MSMEs, and to continue to support women-led initiatives, entrepreneurship training, including digital skills bootcamp,” she outlined.

The DBJ is a public body in the Ministry of Economic Growth and Job Creation that channels financing to MSMEs, as well as large projects, to facilitate economic growth and development.

“It will continue to pursue innovative means of mobilising funding and leveraging private-sector investment and expertise through its venture capital programme, as well as public-private partnerships and privatisation transactions,” Mrs. Williams said.

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JA$2 Billion in Support to Jamaican MSMES

“Small business owners have said to me that opening a bank account for their business is difficult. They feel there’s no difference between the requirements for them as MSMEs, as opposed to a very large institution,” she noted.

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2 weeks ago

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March 16, 2025

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The Development Bank of Jamaica (DBJ) has been allocated $2 billion in the 2025/26 Estimates of Expenditure to support funding to the micro, small and medium-sized enterprise (MSME) sector.

Minister of Finance and the Public Service, Hon. Fayval Williams, made the disclosure while delivering the opening presentation in the 2025/26 Budget Debate in the House of Representatives on Tuesday (March 11).

“It (the DBJ) will continue to pursue innovative means of mobilising funding and leveraging private-sector investment and expertise through its venture capital programme, as well as public-private partnerships and privatisation transactions,” she informed.

Mrs. Williams noted the Government’s commitment to the MSME sector, which includes an estimated 422,000 registered small businesses, generating 80 per cent of the jobs in the economy.

Approximately 1,136,240 persons are employed by MSMEs.

The Minister acknowledged that there are several issues facing the sector, including lack of equitable access to financing, high interest rates and cumbersome requirements for opening bank accounts.

“Small business owners have said to me that opening a bank account for their business is difficult. They feel there’s no difference between the requirements for them as MSMEs, as opposed to a very large institution,” she noted.

She pledged to work with Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, to reduce the requirements for the entities to open bank accounts.

The Finance Minister noted, further, that Government will be increasing the General Consumption Tax (GCT) exemption for small businesses from $10 million to $15 million.

By: Donique Weston JIS

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Jamaica Open For High-Value Agricultural Investments – Minister Green

“Now is the time for high-value agricultural investment, right here in Jamaica. Things that we produce in Jamaica are sought after all over the world. As such, we do believe there are significant opportunities now in agro processing,” Mr. Green said.

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2 weeks ago

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March 16, 2025

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Jamaica is being touted as a prime destination for high-value agricultural investments.

Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, highlighted that the country is at a pivotal stage in its transformation, pointing out that the Ministry’s key objectives are to drive investment, expand trade, and strengthen food security.

“To achieve this objective, the nation must collaborate with its international partners,” he told members of the Diplomatic Corps on Wednesday (March 12).

Minister Green said Jamaica, having seen a declining debt-to-GDP ratio and myriad other positive economic outcomes in recent years, is well positioned to take advantage of global opportunities.

He was speaking during a Ministerial Briefing at the Ministry of Foreign Affairs and Foreign Trade in downtown Kingston, which formed part of activities marking Diplomatic Week 2025.

Mr. Green said while Jamaica currently benefits from several trade arrangements with its regional partners, the Government wants to expand the global footprint in trade and investment.

“What we want to see from my Ministry’s perspective [is] how we can leverage these arrangements to do much more. As such, we want to work with you (the diplomatic corps) to drive trade expansion, to reduce market barriers and to facilitate direct connections with importers and distributors so that we can expand our exports,” the Minister outlined.

He added that there are significant investment opportunities and win-win proposals for Jamaica and its partners.

“Now is the time for high-value agricultural investment, right here in Jamaica. Things that we produce in Jamaica are sought after all over the world. As such, we do believe there are significant opportunities now in agro processing,” Mr. Green said.

The Minister emphasised that one area now ripe for investments is orchard crop farming.

“We do have land available for investment in orchard crops. In fact, we’ve developed our first ever mango orchard, or mango agro park, where we invite private-sector investors to come in and establish 50-acre blocks of mango farms. That is going well. In fact, we’ve already established about 200 acres. We want to establish another 300 acres in this financial year,” the Minister outlined.

Mr. Green also touted opportunities in livestock farming and the dairy industry, noting that Jamaica is looking to leverage partnerships in this area.

“We want to facilitate greater bilateral discussions between you and your home countries with Jamaica’s agricultural sector around investment… around connecting investors with local projects that can accelerate economic growth,” he told the diplomats.

Mr. Green pointed out that Jamaica’s collaboration with its international partners has been instrumental in advancing the nation’s economic agenda.

By: Donique Weston, JIS

Photo: Yhomo Hutchinson

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Powering the Future: How Tech and Policy Are Driving Explosive Growth in Energy Storage, Renewables, and EVs

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4 weeks ago

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March 5, 2025

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The energy storage, renewable energy, and electric vehicle (EV) industries are experiencing significant growth, driven by technological advancements and policy support.

Energy Storage Sector

The global energy storage market is projected to expand from USD 416.02 billion in 2025 to USD 841.19 billion by 2033, reflecting a compound annual growth rate (CAGR) of 9.2% (Straits Research, 2024). This growth is primarily attributed to the increasing integration of renewable energy sources and the need for grid stability. In the United States, battery energy storage capacity is expected to nearly double by 2024, reaching over 30 gigawatts (U.S. Energy Information Administration, 2023).Mission-Critical Energy Storage Battery Pack Sector.

Mission-Critical Energy Storage Battery Pack Sector

The demand for mission-critical energy storage solutions is intensifying, particularly in sectors requiring an uninterrupted power supply, such as data centres and healthcare facilities. The U.S. battery energy storage system market is anticipated to witness a CAGR of 30.5% from 2024 to 2030, reaching USD 4.4 billion by 2030 (Grand View Research, 2023). This surge is driven by the need for reliable backup power and the integration of renewable energy sources into critical infrastructure.

Renewable Energy Industry

The renewable energy sector is undergoing rapid expansion. In 2024, the United States added 48.2 gigawatts of solar, wind, and battery storage capacity, a 47% increase from the previous year (The Guardian, 2025). Declining costs and supportive policies like the Inflation Reduction Act 2022 propel this growth. Globally, China has made significant strides, adding clean energy generation in the first half of 2024, equivalent to the entire electricity output of the United Kingdom for the previous year (The Guardian, 2024).

Electric Vehicle Industry

The EV market is expanding swiftly. In 2023, electric cars accounted for approximately 18% of all vehicles sold globally, up from 14% in 2022 (International Energy Agency, 2024). Projections indicate that by 2024, 25% of all new passenger car registrations will be electric, surpassing 17 million units in sales worldwide (GreenMatch, 2024). This trend is supported by technological advancements, increased consumer acceptance, and policy incentives to reduce carbon emissions. These industries are experiencing robust growth, driven by technological innovation, policy support, and a global shift towards sustainable energy solutions.

Extracted from Alexander Melville Chief Executive Officer Tropical Battery Company Limited (TROPICAL) – Interim Financial Statements For The First Quarter Ended December 31, 2024

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Corporate Movements: Margaret Campbell Appointed CEO of GKMS Group; Lee-Anne Bruce Named COO

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4 weeks ago

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March 5, 2025

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GraceKennedy Limited (GK) is pleased to announce leadership changes at GraceKennedy Money Services (GKMS) as part of its ongoing succession plan and strategic talent development and deployment.

Effective April 1, 2025, Margaret Campbell will assume the role of Chief Executive Officer (CEO) of the GKMS Group. Campbell, who has worked with GKMS for over 25 years, has served as its Chief Operating Officer (COO) since 2020. She joined GKMS in 1996 and has held several leadership roles during her tenure including, Financial Controller, Chief Financial Officer (CFO), and Country Manager for GKMS Jamaica. A Fellow Certified Chartered Accountant, Campbell also holds an MBA in Finance from the University of Manchester and serves on several GK subsidiary boards. She is also the current President of the Jamaica Money Remitters Association.

Frank James, Group CEO of GraceKennedy, expressed confidence in Campbell’s leadership, stating, “Margaret has demonstrated strong leadership and an unwavering commitment to providing exceptional value and convenience to our customers across Jamaica and the wider Caribbean, in keeping with our vision of being the number one Caribbean brand in the world. I have no doubt she will continue to drive GKMS forward.”

Grace Burnett, CEO of GKFG, added, “Margaret’s industry expertise and strategic approach make her the ideal person to lead GKMS into the future. Her experience and passion for operational excellence will be instrumental as GKFG continues to grow and evolve.” The announcement of Campbell’s appointment comes as Burnett, who has led GKMS since 2019, prepares to retire from GraceKennedy later this year.

Lee-Anne Bruce

Additionally, GraceKennedy has named Lee-Anne Bruce as the new COO of the GKMS Group, also effective April 1, 2025. Bruce holds a bachelor’s degree from the Frank G. Zarb School of Business at Hofstra University and is a Certified Anti-Money Laundering Specialist. With over a decade in senior leadership roles at GK, she has served as Group Chief Compliance Officer, Chief Risk Officer, and most recently, Chief Audit Executive. She began her career at GK in 2003, when she played a key role in GKMS’ expansion into the Eastern Caribbean.

Margaret Campbell, incoming GKMS CEO, welcomed Bruce’s appointment, stating, “Lee-Anne is no stranger to GKMS and her extensive experience and understanding of our business will undoubtedly be invaluable in her new role.”

In light of the leadership changes at GKMS, Judith Chung, Group Chief Compliance Officer & Senior Legal Counsel, will act as Chief Audit Executive of GraceKennedy Limited, while Jason Bailey, Head of Risk, will temporarily assume responsibility for the Compliance portfolio.

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