Businesses dread ‘confusing’ projections
The business community remains ambivalent about economic recovery in the face of conflicting growth projections and is not quite sure what to think, the island’s largest private sector grouping has said.
And local businesses will follow with keen interest Government measures to raise revenue and cut expenditure in the next fiscal year, according to the Barbados Private Sector Association (BPSA).
The Central Bank of Barbados has predicted economic growth of about 1.8 per cent for 2016, but the Caribbean Development Bank (CDB) has presented a less optimistic outlook, projecting that the Barbados economy would grow by a marginal 0.9 per cent.
However, Minister of Finance Chris Sinckler disclosed last week that an International Monetary Fund (IMF) team had indicated that the island was being conservative in its growth projections and could experience about two per cent growth this year.
“In the private sector our concern has always been this asymmetry of information, many different conflicting views and not all in the same direction,” BPSA Chairman Alex McDonald said.
“We are not squabbling about a two per cent, 2.5 per cent or three per cent; we are hearing of good growth if it is two per cent, according to Sinckler if the IMF view is correct. Two per cent is a strong indicator of a recovering economy, whereas a flat level would be flat compared to last year, which itself was also flat, which would be the opposite of a rosy picture being painted,” McDonald added.
Commenting on the Appropriation Bill 2016 debate, McDonald told Barbados TODAY the country was in “a very awkward” financial position.
In any event, the BPSA boss maintained that much of the economic activity depended on the speed with which Government could get its major projects off the ground. This, he said, would give the private sector a greater sense of confidence.
“In the private sector we kind of wait to see how it pans out, and how quickly those projects start so that we can take advantage of the supplies and services and ancillary services around them.”
However, he said local businesses remained concerned about Government’s expenditure and its ability to finance some of its programmes.
“So our watch will be on the measures that will be put in place to raise the revenue to finance Government’s plans. We have heard a sturdy debate on both sides that reflects, I think, the nature of where we are, which is in a very awkward position financially.
“What we see is also Government’s intention to spend on some capital works and so on, which is good. That has the effects of creating jobs and employment and starting to put much needed oxygen into the economy. That is good. But we also have to balance that against the ability to afford it. So these are things that occupy economic planners,” he added. (MM)