In his November monthly letter, Central Bank of Barbados Governor Kevin Greenidge emphasized that the sources of economic growth matter for the country’s ability to finance imports, as fuel costs rise while tourism receipts remain flat. He also advised businesses preparing 2027 budgets to examine sales volumes, pricing and margins before committing additional capital.
The bank’s review of the first nine months showed economic growth of 1.4%, comprising a 1.8% expansion in the nontraded sector and a 0.6% contraction in the traded sector. Tourism output fell 1.2% as visitors stayed fewer nights despite a slight increase in arrivals. Fuel accounted for more than the entire increase in the merchandise import bill, while receipts from tourism, the largest single source of foreign exchange, were flat. Bookings for October to December stood 9.7% above a year earlier in late September, but the focus is on their conversion into visitor nights, spending and foreign exchange earnings.
For businesses, higher revenue needs to be assessed against demand, pricing and profitability. A full order book can coexist with thinner margins or more cash tied up in receivables. Investment calculations should use financing costs actually available to firms rather than U.S. market yields. Local lending rates averaged 5.2% in September, unchanged from a year earlier.