Brief on the Barbados Economy

The Barbados Economy 2016

The Barbados economy during the year 2016 has continued to demonstrate its resilience in a number of ways but prevailing headwinds present evident downside risks to the sustainability of the economy.

The economy has grown by 1.6 per cent at the end of the review period. This represents a 0.7 percentage point increase when compared to the previous period and marks the third consecutive
year of growth. Underpinning this growth were developments in the traded and nontraded 
sectors, which grew by 2.2 percent and 1.5 per cent respectively. Driving the growth of the traded
sector was the burgeoning tourism industry, which increased by 4.8 per cent over the preceding year. This was followed by the non-sugar agriculture sub-sector, which recorded a 1.5 per cent
growth rate. Notably, sugar production recorded the largest decline of 33.3 per cent marking the fourth consecutive year of negative growth.

Growth within the non-traded sector was attributed to increased activity in the construction as well as the
finance and other services industries. These sub-sectors grew by 2.8 and 2.5 percent respectively. The transport sector also continued to register its strongest performance since 2012 registering a 1.8
per cent growth over the 2015 period.

At the end of 2016, provisional estimates of the Nominal Gross Domestic Product (NGDP) at market prices indicated a decline by 1.2 per cent to register total output at $9,058.1 million when compared to the 2015 output value of $9,168.3 million. This decline in market activity was attributed to the relatively low international prices coupled with dampened domestic demand conditions, which led to a cost
competitive environment.

Driving the decline in nominal output levels were key sectors such as the manufacturing sector which declined by 14.9 per cent amounting to a $76.8 million fall off in output value. This was followed by a decline in the construction industry whose value-added contribution contracted by 7.6 per cent or $40 million while the real estate sub-sector also decline by 5.6 per cent reflecting a market price decline of $58.4 million.

Per capita GDP (basic prices) declined by an estimated 1.6 per cent to record BDS$28.6 thousand (US$14.3 thousand) compared with BDS$29.1 thousand (US$14.5 thousand) in 2015. The stock of foreign reserves at the end of December 2016 was estimated at $681.1 million, 10.3 weeks of import
cover. This represents a decline of 26.5 per cent when compared to the previous year’s stock of $926.8 million at 13.6 weeks of import cover.

The unemployment rate fell to 9.0 per cent at the end of the 2016 period, down by 1.2 percentage points when compared to the 2015 period. The male unemployment rate settled at 9.4 per cent, a reduction of 2.3 percentage points, while the unemployment rate for females remained unchanged at 8.6 percent.