A sustained run of economic growth has not insulated Barbados from mounting external risks, the opposition Democratic Labour Party has warned, pointing to slowing momentum, heavy reliance on tourism and construction, and unanswered questions over fiscal strategy as the country prepares for possible IMF support.
Despite reports of 20 consecutive quarters of economic growth from Central Bank governor Dr Kevin Greenidge on Wednesday, the DLP called for greater emphasis on economic diversification.
He also revealed that Barbados will soon begin talks with the International Monetary Fund (IMF) on a standby arrangement designed to provide rapid access to financing in the event of economic shocks.
Senator Ryan Walters, DLP shadow finance minister, in a statement responding to the report, pointed to what he described as contradictions in the economic outlook: “On one hand, the economy is doing excellent. On the other hand, the government will meet very soon with the International Monetary Fund to discuss a standby arrangement.”
Senator Walters also pointed to a slowdown in economic momentum between the first quarter of 2025 and the first quarter of 2026.
He said: “While Barbados has recorded 20 consecutive quarters of growth and a 1.7 per cent expansion in the first quarter of 2026, this represents a slowdown from 2.6 per cent in the corresponding period last year. This trend reinforces a longstanding concern: in the absence of targeted economic diversification, the economy remains heavily exposed to external shocks, particularly those affecting tourism and construction, the two primary drivers of current growth.”
He warned that Barbados’ continued reliance on tourism and construction increases its vulnerability to external shocks.
“We are not seeing the corresponding foreign receipts or earnings from tourism although it is suggested that arrivals are above pre-pandemic levels. This suggests that tourism spend is down amidst what the government refers to as record arrivals. Additionally, it also begs the question if most of the much-touted construction boom that the country is seeing is being financed locally rather than by foreign direct investment.”
The opposition senator stressed the need to reduce dependence on these industries, while calling for greater diversification into agriculture, manufacturing and energy: “Greater emphasis must be placed on developing agro-processing, investing in alternative energy, and advancing the creative economy particularly in areas such as film, digital media and local content production. These sectors represent real opportunities to broaden the economic base and build resilience.”
Senator Walters also called for greater transparency from the government, urging authorities to fully explain the economic report to the public.
“Questions also arise regarding public expenditure and accountability. Significant capital allocations including projects that have faced delays or underperformance do not appear to have been meaningfully adjusted.”
He noted that without this critical information, it is difficult to properly evaluate the sustainability of current fiscal and economic trends.
The DLP spokesman also raised concerns about fiscal sustainability and debt management.
“To date, no clear and credible strategy has been articulated for servicing upcoming obligations to lenders and the International Monetary Fund, including payments estimated at approximately US$72.11m [$144.22m] in 2026.
“It remains unclear whether these commitments will be met through existing fiscal resources, improved revenue performance, or more concerningly, through additional borrowing at relatively high interest rates.”
He warned that repeated refinancing could place the economy under further strain.
“Persistently relying on new loans to repay old ones increases exposure to interest rate shocks, erodes fiscal credibility and risks trapping the country in a cycle where debt grows faster than the economy’s ability to support it.”
Senator Walters added that while the economy has continued to grow steadily, many Barbadians are not experiencing the benefits in their daily lives or in public services:
“Growth without transparency, diversification, and tangible improvements in national development cannot be considered fully secure.”
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