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Barbados 2018-2019 Economic Review

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5 years ago

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OVERVIEW

In 2018 Barbados strengthened its reform impetus to start addressing its precarious balance of payments and fiscal situations. In response to the worsening fiscal and external liquidity position, the Government of Barbados (GOBD) announced in June the Barbados Economic Recovery and Transformation Plan (BERT), which aims to restore macroeconomic stability and place the economy on a path of strong, sustainable

and inclusive growth, while safeguarding the financial and social sectors. Included in BERT was the suspension of payments due on debt owed to external commercial creditors and a comprehensive domestic and external debt restructuring.

Fiscal austerity measures related to BERT and the challenging macroeconomic situation negatively impacted the non-traded sectors.

These effects more than offset modest gains in tourism and led to economic contraction of 0.6% in 2018. Inflation fell, but remains above its long-term trend, while public sector layoffs may have contributed to rising unemployment in the fourth quarter (Q4) of the year.

The public finance outturn improved due to deeper fiscal austerity measures, and contributed to a decline in public debt.

Gross international reserves returned to the international benchmark of three months of import cover.

KEY DEVELOPMENTS IN 2018

Real gross domestic product (GDP) contracted by an estimated 0.6% in 2018, (see Chart 1). Despite modest gains in the tourism sector (where activity grew by 0.6%), the decline in overall GDP was due to a 7.0%

fall in construction output and declines in other non-traded sectors such as distribution; business and services; transportation; storage; and communication.

The number of overnight arrivals was 2.8% higher than in 2017, due to increased marketing and additional airlift. However, growth in tourism was constrained by reduced length of stay as more visitors arrived from the United States and Canadian markets compared with the longer-staying visitors from the United

Kingdom (UK). This may be due in part to slower economic growth in the UK and a weaker Pound sterling. Cruise ship passenger arrivals were down, as the number of ship visits fell by almost 10.0%, after the re-routing of vessels in 2017, related to the impact of Hurricanes Irma and Maria.

Fiscal austerity measures related to BERT and concerns about the challenging macroeconomic situation adversely impacted the performance of the non-traded sectors.

Large-scale public and private sector projects were delayed, and the public sector layoffs in the final quarter of 2018 impacted domestic consumption with negative pass-through effects to the rest of the economy.

Inflation pressures eased in the second half of the year. Inflation declined to 3.7% from 4.5% in 2017. These are higher price increases than the trend in previous years, and are mainly due to the impact of the National Social Responsibility Levy (NSRL) and higher international crude oil prices. The removal of NSRL in July 2018, and the softening in international crude oil prices in Q4, both helped to reduce the domestic inflation rate.

The average unemployment rate fell to 9.2% for the four quarters ending September 2018. However, public sector layoffs in Q4 may have contributed to a higher unemployment rate in December 2018.

The fiscal outturn improved as a result of deeper austerity. The primary balance strengthened to 3.4% of GDP for the nine-month period to December 2018, above both the targeted primary balance of 3.3% for

Fiscal Year (FY) 2018/196 and 3.1% in the previous FY. The fiscal austerity programme was underpinned by lower interest payments associated with the sovereign debt restructuring and reduced transfers and subsidies, particularly to state-owned enterprises (SOEs). Broad-based reforms8 to SOEs are underway, on a phased basis, to streamline their operations.

On the revenue side, increased collections (due mainly to a boost in corporate tax receipts9) also contributed to better fiscal performance. New taxes10 were introduced to widen the tax base and the NSRL was removed. Corporate tax rates were also revised as a result of the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting initiative. The improved fiscal performance contributed to the public sector debt declining to 126.9% of GDP at the end of December, from 148.4% in March. BERT targets a public sector debt to-GDP ratio of 100% by FY 2022/23 and 60% by FY 2033/34.

Commercial banks continued to be characterised by high levels of excess liquidity. The excess cash reserve ratios of commercial banks increased to 16.2% as at December 2018 from 14.1% in the same period in 2017. In the same period, credit to the private sector increased by $227.1 million to $5.8 billion. Meanwhile, the ratio of non-˗performing loans to total loans increased slightly to 11.2% at the end of 2018, from 7.9% at the end of 2017. The reported capital adequacy ratio declined slightly to 15.6%, having been 17% one year before.

The Central Bank of Barbados (CBB) eased its monetary policy stance by lowering the reserve requirement. Improvements in the government fiscal position in 2018 prompted CBB to ease its monetary policy stance. This was a reversal of the December 2017 phased increased in the Barbados dollar securities reserve requirement ratio, which had been intended to provide liquidity support to GOBD. CBB reduced the securities reserve requirements ratio for commercial banks from 20% to 17.5%, effective November 2018.

The debt restructuring came in the immediate aftermath of the adoption of the new accounting standards ‒ International Financial Reporting Standard (IFRS) 9 ‒ with implications for the balance sheets of institutions that held government securities. In particular, IFRS9 requires financial institutions to make loss provisions against all exposures with inherent credit risk, rather than against only those assets that have actually defaulted.

These implications have been reduced somewhat following recent improvement in the country’s credit rating.

Gross international reserves were boosted with the support of international financial institutions. These reserves, which reached a low of 5-6 weeks of import coverage at end of May 2018, more than doubled to 3.4 months as at December 2018).

Accumulation of international reserves was helped, in part, by external financing from the Caribbean Development Bank (CDB), the International Monetary Fund, and the Inter-American Development Bank.

Barbados received its first domestic credit rating upgrade in several years. Standard & Poor’s (S&P) raised its long and short-term local currency sovereign credit ratings on Barbados to ‘B-/B’ from ‘SD/SD’ (selective default) in November 2018. S&P also affirmed its ‘SD/SD’ long and short-term foreign currency credit ratings on the island, and its ‘D’ (default) ratings on Barbados’ foreign-currency issues. The foreign currency rating will remain at Selective Default until Barbados resolves its foreign debt restructuring.

OUTLOOK

CDB expects real GDP growth to be flat in 2019. Economic activity is premised on favorable tourism performance due to growth in major tourism source markets, the opening of Ross University School of Medicine (RUSM), and an anticipated expansion of airlift. The influx of medical students associated with

RUSM may also positively impact other industries such as distribution and transport. This will more than offset the expected drag on economic activity related to the commencement of the next phase11 of BERT and the continuation of fiscal austerity measures.

There is notable upside risk to the forecast depending on the timing of planned private sector projects and possibly higher external demand for financial services as investor confidence strengthens. If the planned private sector projects materialise in the first half of 2019, growth is likely to be positive. On the downside, tensions in the United States of America and Europe (BREXIT) could dampen growth prospects. Also, the Barbados economy remains vulnerable to changes in the price of international commodities and the adverse impacts of climate change and sea level rise. The negotiation of the external debt restructuring is also important for external financing flows.

Source: Regional Economic Summary 2018 Caribbean Development Bank

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Businessuite News24

Unlocking Future Potential: The Impact of USAGE Group’s Internship Programs on Tertiary Level Students

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1 month ago

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March 22, 2024

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Bridging the Gap Between Education and Real-World Experience

In today’s competitive job market, the value of practical experience cannot be overstated. Recognizing this need, USAGE Group has pioneered an innovative approach to talent development through its structured Internship Programs, offering university and college-level students unparalleled opportunities to gain hands-on experience while completing their academic requirements.

Empowering the Next Generation:

At USAGE Group, internships are more than just a temporary stint; they are a gateway to professional growth and career advancement. Through carefully crafted programs, students are immersed in real-world projects and mentored by industry experts, equipping them with the skills and knowledge needed to excel in their chosen fields.

A Dual Purpose:

The internship programs at USAGE Group serve a dual purpose, benefiting both students and the company itself. For students, these programs provide invaluable exposure to the inner workings of a dynamic business environment, allowing them to apply theoretical concepts learned in the classroom to practical, real-life situations. Additionally, students accrue hours of hands-on work experience, fulfilling requirements for their academic programs while laying the foundation for future career success.

Opportunities for Growth:

Interns at USAGE Group are not merely bystanders; they are active participants in the company’s mission to deliver top-tier support services to Caribbean SMEs. From assisting with client projects to contributing to strategic initiatives, interns are given meaningful responsibilities that challenge and inspire them to reach new heights. Moreover, they have the opportunity to work alongside seasoned professionals, gaining insights and mentorship that are invaluable to their professional development.

Building a Talent Pipeline:

By investing in internship programs, USAGE Group is not only nurturing the next generation of talent but also building a pipeline of skilled professionals who may eventually join the company on a full-time basis. Through internships, USAGE Group identifies promising individuals who embody the company’s values and ethos, laying the groundwork for future recruitment and retention efforts.

Testimonials from Interns:

“The internship program at USAGE Group has been a transformative experience for me. Not only have I gained practical skills that will serve me well in my career, but I’ve also had the opportunity to work alongside some of the brightest minds in the industry.” – Sarah, Business Administration Student

“I never imagined that an internship could be this impactful. At USAGE Group, I’ve been given real responsibilities and treated as a valued member of the team. It’s been an eye-opening experience that has solidified my career aspirations.” – John, Computer Science Student

Join the Journey:

For university and college-level students seeking to gain practical experience and jumpstart their careers, USAGE Group’s Internship Programs offer a pathway to success. Whether you’re studying finance, marketing, IT, or any other field, there’s a place for you to thrive at USAGE Group.

Contact USAGE Group Today:

To learn more about internship opportunities at USAGE Group and how you can become a part of our dynamic team, contact us today.

Contact Information: Email: usagejamaica@gmail.com

USAGE Business Support Services Group Internship Program Application Form – 2024

As USAGE Group continues to lead the way in revolutionizing business support services in the Caribbean, its commitment to nurturing talent and empowering the next generation remains unwavering. Through internship programs that prioritize hands-on learning and professional growth, USAGE Group is shaping the future of the region’s workforce, one student at a time.

Proud Member and Partner of The Silicon Mountain Project
Operating from “Silicon Mountain – The Business Technology and Innovation Hub of the Caribbean”
Mandeville Manchester Jamaica

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Revolutionizing Business Support Services in the Caribbean: The USAGE Group Story

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1 month ago

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March 22, 2024

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How USAGE Group is Redefining IT-Centered Support for Caribbean SMEs

In the dynamic landscape of Caribbean business, where innovation meets necessity, one company stands out for its commitment to delivering top-tier support services to small and medium enterprises (SMEs). Conceptualized and formed in 2020, USAGE Business Support Services Group has swiftly emerged as a beacon of efficiency and cost-effectiveness, offering a comprehensive suite of Corporate and Operational Services tailored to meet the unique needs of Caribbean businesses.

Unveiling USAGE Group:

At the heart of USAGE Group’s mission is a dedication to providing IT-centered Business Support Services that empower Caribbean SMEs to thrive in today’s competitive market. With a diverse range of offerings, including Accounting and Finance solutions, USAGE Group is not just a service provider but a strategic partner committed to the success of its clients.

Putting Customer Experience First:

What sets USAGE Group apart is its unwavering commitment to customer service and experience. Embedded in the company’s DNA is the mantra “U In Everything We Do,” reflecting a culture that prioritizes the needs and satisfaction of its clients above all else. From the initial consultation to post-implementation support, USAGE Group ensures a seamless and enjoyable experience for every client.

Why Partner With USAGE?

Affordable Quality Monthly Subscription Services: USAGE Group offers cost-effective subscription services designed specifically for SMEs, providing access to high-quality support without breaking the bank.

Access to Multitalented Professionals: Clients of USAGE Group benefit from a team of self-motivated professionals with diverse skills and experiences, capable of tackling even the most complex business challenges.

Expertise and Guidance: Beyond service delivery, USAGE Group offers expertise and guidance to clients, ensuring that every step of the process is smooth and collaborative.

True Collaboration: At USAGE Group, every project is approached as a collaboration, guiding clients from their current state to their desired outcomes with a process that prioritizes mutual growth and success.

Commitment to Quality: From concept to implementation and beyond, USAGE Group remains committed to delivering quality services that positively impact the bottom line of its clients.

Empowering SMEs for Success:

The overarching goal of USAGE Group is clear: to provide SMEs with first-world Accounting, Finance, and Corporate Services that exceed expectations, unlocking their full potential and driving tangible results. By maximizing Business-to-Business (B2B) opportunities and fostering long-term partnerships with SME CEOs, Entrepreneurs, and Business Owners, USAGE Group is poised to catalyze growth and expansion across the English-speaking Caribbean.

In a landscape where agility and innovation are paramount, USAGE Group stands as a testament to the transformative power of strategic partnership and customer-centricity. As Caribbean SMEs navigate the complexities of the modern business world, USAGE Group emerges as a trusted ally, empowering them to thrive and succeed in the digital age.

Contact USAGE Group Today:

For SMEs seeking to revolutionize their business support services and unleash their potential, USAGE Group offers a pathway to success. Contact USAGE Group today for a free consultation and discover how their innovative solutions can transform your business.

Contact Information: Email: usagejamaica@gmail.com

USAGE Business Support Services Group Internship Program Application Form – 2024

Proud Member and Partner of The Silicon Mountain Project
Operating from “Silicon Mountain – The Business Technology and Innovation Hub of the Caribbean”
Mandeville Manchester Jamaica

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Businessuite Markets

A.S. BRYDEN Acquires Control Of Stansfeld Scott In Barbados

Published

2 months ago

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March 6, 2024

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A.S. Bryden & Sons Holdings Limited (“A.S. Bryden”) today announced that it has acquired a 55% controlling stake in Stansfeld Scott (Barbados) Limited (“SSB”).

SSB is a leading distributor and retailer of wines, spirits and consumer health products in Barbados. SSB’s products include El Dorado and Plantation rums, Glenfiddich whisky, Stolichnaya vodka, Banrock Station and Lamothe Parrot wines, Twining’s teas, Haliborange vitamins and Endura Malt. In addition to its distribution business, SSB operates six Wine World branded retail stores across Barbados.

P.B. Scott, Chairman of A.S. Bryden

The transaction will allow A.S. Bryden to expand its premium beverage business outside of Trinidad for the first time. Brian Cabral, the outgoing Chairman of SSB, will retain an ownership interest in the Company following the transaction and will remain a director. Stansfeld Scott International, a master distributor of wines and spirits across the Caribbean and Central America which is also owned by Mr. Cabral and his partners,

Jayshree Kessaram and Indra Cabral will not be impacted by this transaction.

In speaking about this development, P.B. Scott, Chairman of A.S. Bryden said, “Brian Cabral, his family and his team have spent decades carefully building Stansfeld Scott into the highest quality wines and spirits distributor and retailer in Barbados. We look forward to joining forces and using A.S. Bryden’s resources to serve Stansfeld Scott’s employees, customers and its principals.”

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Trade and Investment Most Sustainable Avenue for Growth…Holness

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4 months ago

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December 12, 2023

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Prime Minister, the Most Hon. Andrew Holness, says Jamaica and the wider region see trade and investment as the most sustainable avenue for the region’s growth and development.

Speaking in the Kingdom of Saudi Arabia where the inaugural Saudi Arabia-CARICOM Summit is being held, Mr. Holness said that investment is a strategic way of increasing wealth without accumulating significant debt.

He noted that the region has put strong measures in place to safeguard investments.

“If we are to focus on investment as the strategic direction for development, our investors can rest assured that the entire region has made commitments for strengthening and deepening our institutional frameworks to protect investments,” he noted.

“We have very strong institutions, certainly, in terms of our legal and justice systems, to support and protect contracts. We have very strong regulations for our financial sector and our financial markets. So, in terms of an investment framework, the region, I think, is significantly attractive in that way,” he added.

Mr. Holness noted that the region welcomes the strengthening and deepening of the relationship with Saudi Arabia.

“As we go forward… investment and trade should be the key strategic direction. The region has great potential for the exploitation of renewable energy… and, therefore, Jamaica, in particular, would be willing to explore investments in this regard,” he said.

The Prime Minister noted that the region is a net supplier of talent to markets in proximity in North America and Europe, noting that “we can manage significant investments in terms of human resources”.

“The Caribbean, though we are Small Island Developing States (SIDS) we have tremendous opportunities for significant investments. Where we are located, we have great logistics opportunities, shipping… and we would be very interested in hearing the investment potentials that exist for that,” Mr. Holness said.

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CinemaONE Reporting Growth And Delivery Of More “Normalized” Revenue And Operating Results For The Half Year Period Ended March 31, 2023.

Published

11 months ago

on

May 19, 2023

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Brian Jahra Chairman of CinemaONE has released the following summary interim financial performance report for the second quarter (Q2) period of FY 2023

Overview

As of March 31, 2023, the global box office achieved the highest quarterly result in the pandemic era, rising to US $8.0 Billion in global box office receipts, representing a 27% increase over the same period in 2022. The success of Avatar The Way of Water continued into the new year and propelled Avatar the Way of Water to US $2.3 Billion, which is the 3rd best movie performance of all time. Other noteworthy movie releases in the January – March 2023 period included Creed II and the locally popular John Wick 4.

FY 2023 has commenced with a significant improvement in film volume, which was down approximately-36% in 2022 versus the pre-pandemic period. Greater film volume, coupled with the recent reaffirmation from all major studios in the value of wide theatrical releases on 2,000 or more screens and, most importantly, coupled with movie theatre exclusivity periods, augurs well for the sustained recovery of the cinema exhibition industry.

In this context, Management remains very encouraged about the industry’s accelerating momentum which has also been demonstrated by CinemaONE’s growth and delivery of more “normalized” revenue and operating results for the Half Year period ended March 31, 2023.

Financial Performance

A summary of CinemaONE’s improved interim financial performance for the second quarter (Q2) period of FY 2023 in comparison to the C-19 impacted Q2 period of the Prior Year is outlined below.

Gross Revenue increased by 90% to TT $7.7M (FY 2022: TT$4.0M).
Gross Profit similarly increased by 87% to TT $4.6M (FY 2022: TT $2.5M).
Operating Profit was TT $.6M a significant increase over the Prior Year period (FY 2022: TT $.1M).

CinemaONE also narrowed Net Loss to TT-$.2M (FY 2022: TT-$.3M). EBITDA notably increased by 104% to TT $2.8M (FY 2022: TT$1.4M).

The Company’s second location in Gulf City Mall made a meaningful contribution in all performance indicators.

In January 2023, CinemaONE also strengthened its Financial Position by consummating a successful equity rights issue, enabling the Company to reduce debt and its debt to capitalization ratio to 64.1% (FY 2022: 69.6%) and to strategically position the Company to prudently pursue expansion opportunities such as the planned re-opening of the cinema facilities in Price Plaza Shopping Center, Chaguanas.

Future Outlook

Second-trailer-for-Fast-X-reveals-even-more-cars

CinemaONE maintains a positive outlook for the global cinema exhibition industry based on both the empirical results from the industry’s continued rebound and the Company’s recent financial performance. Moviegoers have been delighted by nostalgic franchises delivered in a larger-than life cinematic setting such as the April release of Super Mario Brothers which is the first movie of 2023 to surpass US $1 Billion in box office receipts.

In addition, movie volume in 2023 is forecasted to finally be on par with 2019 and studios have confirmed release dates for highly anticipated and more diverse movie titles including the following upcoming movie releases in May-August 2023, which is historically the best performing period in the calendar year: Guardians of the Galaxy Vol. 3, Fast X, The Little Mermaid, Spiderman: Across the Spider-verse, The Flash, Indiana Jones and the Dial of Destiny, Barbie, Mission Impossible: Dead Reckoning Part One, Blue Beetle, Gran Turismo, and Teenage Mutant Ninga Turtles.

 

I wish to thank our shareholders, customers, and employees for the continued confidence in the global entertainment industry.

See You at the Movies!

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