Barbados affected by global credit crunch

By Melissa Bryant
Reporter~SKNVibes.com

BRIDGETOWN, Barbados – GOVERNOR of the Central Bank of Barbados (CBB) Dr. Marion Williams has stated that the global credit crunch has caused some international investors to delay their commitment to commercial projects on the country’s famed “platinum coast”.

According to Caribbean 360, these comments were made on Tuesday (Oct. 28) during a press briefing outside CBB Headquarters, in which Dr. Webster presented a retrospective on the 2008 financial year and an outlook for 2009.

She noted that the unemployment rate rose from 6.7 percent at the end of December 2007 to 8.6 percent at the end of June 2008 due to job losses concentrated in the utilities, construction and distribution sectors.

She further added that the gross domestic product (GDP) fell by more than half of what was recorded for the same period last year due to the slowdown in global output. Between January and September 2008, Barbados registered GDP growth of 1.7 percent in contrast to the 3.5 percent registered by the third quarter of 2007.

The tourism industry has also suffered as a result of the global credit crunch, as hotels have already reported lower occupancy rates and weaker advanced bookings for 2009 and the overall tourism value has only risen by an estimated 1.4 percent, which marks half the growth rate recorded over the same period in 2007.

“The double impact of the threat of recession in Barbados’ main source markets following the financial turbulence there, and rising food and energy prices are responsible for the decrease in long-stay visitor arrivals,” Williams said.

According to Williams, early indicators show that the international financial crisis currently crippling many developed nations has not translated into significant losses for commercial banks operating in Barbados to date. However, she added that in line with the forecasted deceleration in economic growth, the rate of deposit accumulation is also expected to slow.

The future looks even dimmer for the Barbados economy, as she predicted that the unemployment rate is expected to continue its “gradual rise” in 2009 and that GDP growth will be even slower than this year’s.