Economists doubt growth

Date: Thu 19-Aug-1993
Paper Page: 32
Publication: Daily Nation
Byline: Hayden Boyce


IN STARK CONTRAST to predictions of economic growth this year by international and Government experts, local economists say Barbados' economy will record yet another year of decline.

The Barbados Economic Society (BES), in its bi-annual report released yesterday, said it expects economic output for this year will be about the same level as last year when there was a decline of four per cent of real output.

Last month, the Central Bank's Economic Report said prospects were still good for a modest expansion in economic activity this year, especially if the moderate growth in long-stay visitors was sustained.

Less than two weeks ago, the International Monetary Fund's (IMF) resident representative here, Dr. Bernhard Fritz-Krockhow said although progress was slow, the certain "leading economic indicators" pointed to growth.

But the BES' forecast panel only expects to see growth in the tourism and non-sugar agriculture sector, by four per cent and "a little less than three per cent", respectively.

Moreover, although the export of manufactured goods is expected to pick up, the society has forecast further job losses as manufacturing continues to decline.

According to a statement issued by the BES' forecast panel, output from sugar agriculture is anticipated to fall by about 10 per cent and the output from manufactured goods is expected to be below the 1992 levels.

There will be no significant changes in the other sectors. The panel expects the fiscal deficit to be $53 million or somewhat less than two per cent of Gross Domestic Product (GDP).

They expect that this deficit will be financed by equal amounts of foreign funding, credit from the domestic banking system and other domestic sources. The Central Bank should also be able to reduce its lending to Government in the order of $30 million, says the BES.

The tourism sector has been identified as the foreign exchange sector with prospects with modest growth in 1993. Arrivals are expected to be between two and four per cent higher than last year, but it's doubtful whether there will be an increase in the length of stay. Summer occupancy in luxury hotels are expected to fall below expectations.