The International Monetary Fund (IMF) has slightly lowered its economic growth forecast for Barbados.
Prior to last week’s Spring Meetings in Washington DC, the international financial institution has Barbados’ economy growing by 3.9 per cent this year, but the prediction is now down to 3.7 per cent and 2.8 per cent next year.
Barbados’ 2024 growth projection from the IMF’s latest World Economic Outlook is lower than a number of Caribbean countries, and above others.
Guyana leads the pack with a 33.9 per cent growth forecast (18.7 per cent in 2025), followed by Antigua and Barbuda 6.1 per cent (four per cent in 2025), St Vincent and the Grenadines 5.3 per cent (3.9 per cent in 2025), St Kitts and Nevis 4.7 per cent (4.3 per cent in 2025), Dominica 4.6 per cent (4.3 per cent in 2025), and Grenada 4.1 per cent (3.7 per cent in 2025).
Countries with a lower 2024 growth projection than Barbados’s 3.7 per cent are Belize 3.4 per cent (2.5 per cent in 2025), Suriname three per cent (three per cent in 2025), St Lucia 2.4 per cent (2.1 per cent in 2.1), Trinidad and Tobago 2.4 per cent (2.3 per cent in 2025), The Bahamas 2.3 per cent (1.8 per cent in 2025), Jamaica 1.8 per cent (1.7 per cent in 2025), and Aruba 1.1 per cent (1.7 per cent in 2025).
The Caribbean on the whole is projected to grow by 9.7 per cent this year and 6.9 per cent in 2025. Non tourism dependent countries, including commodity exporters, are expected to lead the way with 13.6 per cent growth (9.3 per cent in 2025), while tourism dependent countries including Barbados are expected to grow by 2.5 per cent this year overall (2.1 per cent in 2025).
Speaking during a press briefing at the IMF and World Bank Group Spring Meetings on Friday, Rodrigo Valdes, Director of the IMF’s Western Hemisphere Department said that with Caribbean economies back at pre-COVID-19 pandemic levels, Barbados and other countries would need to implement more reforms if they wanted higher long term growth.
“The Caribbean region has done . . . pretty well in the last few years. If you would have put the shocks that were coming five years ago in the future, I would have been very worried. And reality is that the economy has recovered. The Caribbean region went back to activity levels pre-COVID-19,” he said.
“Some countries are growing faster than others. The group of countries that are more tourism dependent rebounded very quickly and are normalising. We’re going back to normal growth. If we want more growth, what is needed is to work through the underpinnings of long-term growth with reforms of different types.”
Valdes, who met with Caribbean representatives during the Spring Meetings, said that economies in Latin America and the Caribbean have “showed quite a bit of resilience”.
“The rebound from the pandemic has been stronger than previously expected. We see resilience partly as a result of countries progress in strengthening their macroeconomic frameworks. With most economies now operating near potential, however, activity in the region has been generally moderating in recent quarters,” he stated.
“On a positive side, labour markets have remained pretty resilient, with unemployment still at historical low levels almost everywhere. We expect growth in Latin America and in the Caribbean to moderate further this year. Slowing from 2.3 per cent that the region grew in 2023 to two per cent this year.”
