Economist Dr Antonio Alleyne is cautiously optimistic about Barbados’ latest economic performance, highlighting both encouraging signs and underlying vulnerabilities in the economy.
His comments follow the Central Bank of Barbados’ latest economic review, which reported 2.5 per cent economic growth for the first half of 2025, driven by robust performances in tourism, construction, and business services.
Central Bank Governor Dr Kevin Greenidge also noted a projected full-year growth of 2.7 per cent and an expected medium-term average of three per cent, supported by diversification in tourism, infrastructure development, and digital transformation.
Tourism remained a strong pillar, with long-stay arrivals up by 3.3 per cent. The report also revealed a record $3.9 billion in international reserves—equal to 37.4 weeks of import cover–alongside a slowing inflation rate of 0.5 per cent and a declining unemployment rate, now at 6.3 per cent.
Dr Alleyne acknowledged the economic progress:
“At the surface level, it would appear that Barbados continues to recover,” he told Barbados TODAY. “We’ve had growth in tourism, the overall economy has grown . . . reserves are holding strong for months now, so that’s a good thing.”
He praised the government’s achievement of a 3.5 per cent primary surplus, calling it “commendable, particularly in the challenging times that we have”. However, he warned that deeper issues could undercut the sustainability of these gains.
While the unemployment rate has dropped, Dr Alleyne pointed out that productivity levels remain worryingly low, particularly in light of the government’s plans to diversify the economy.
“We’re not being productive . . . . Whether it is the private sector or the government, somebody needs to lead it and find a way to encourage individuals to be more productive in the workplace,” he said.
The lecturer at the Cave Hill Campus of the University of the West Indies also raised concerns about the country’s continued heavy reliance on traditional tourism markets.
He questioned the sustainability of Barbados’ heavy reliance on markets such as the United States, Canada and the United Kingdom, noting the ongoing challenges in the UK and anticipating rising inflation and other costs in the US economy. He suggested that these factors could contribute to a decline in tourism arrivals.
Dr Alleyne also noted that if the island’s growing crime situation is left unchecked, it could reduce the gains recorded in the tourism sector.
The economist explained, “The Central Bank needs to ask itself, ‘how does this affect the tourism product [going forward]?’ Because if you think about it, the crime rate is a deterrent for tourists. So if you don’t get that under control, then that could also play a role in our growth potential, because we know for a fact that tourism is a significant contributor to the GDP.”
Dr Alleyne stressed that his main concern is the government’s decision some months ago to borrow US$500 million (BDS$1 billion), a move intended to refinance existing debt and unlock hundreds of millions of dollars for social programmes. The government has said the measure would strengthen economic resilience and safeguard essential public services.
“You’re borrowing money to pay debt,” he said. “That to me internally underlines and tells me that there are financial concerns that we need to worry about, because we are saying, more or less, that we are unable to pay our immediate debt.”
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