The economy continues to grow, expanding by 2.5 per cent in the first half of the year despite “intensifying global risks”.
Central Bank Governor Dr Kevin Greenidge reported this yesterday and said gross domestic product (GDP) was expected to increase by 2.7 per cent for the year overall.
With the unemployment rate at a record low 6.3 per cent at the end of the first quarter, Greenidge flagged this as major evidence of the economy’s sustained growth trajectory.
Meanwhile, international reserves expanded by $695.2 million, reaching a record $3.9 billion, equivalent to 37.4 weeks of import cover, well above the international benchmark.
Greenidge presented the bank’s review of the economy’s January to June performance yesterday during a press conference at the Frank Collymore Hall.
Tourism
“Tourism and non-traded sector activity drove growth in the first half of the year. Output in the traded sector rose by 3.9 per cent, as gains in tourism and agriculture offset declines in manufacturing,” he said.
“Growth in construction, business and other services, and wholesale and retail trade contributed to a 2.3 per cent increase in non-traded sector activity. Combined, these developments lifted real GDP by an estimated 2.5 per cent during the period.
“Tourism activity expanded in the first half of the year, boosted by strong demand from the United States. Long-stay arrivals increased by 3.3 per cent during the first half of 2025, supported by additional airlift and targeted marketing across key source markets.”
Greenidge noted that the momentum from the economic growth “pushed the unemployment rate down to a record low of 6.3 per cent in the first quarter”, down from 6.9 per cent in the first quarter of 2024.
“A fall in persons unemployed in construction, administrative and support services, and wholesale and retail trade, supported the improvement, offsetting temporary layoffs in the tourism sector,” he said.
“Jobless claims increased by 11 per cent over the first half of the year due to hotel renovations, but remained below pre-pandemic levels. The labour force expanded by 3 600 persons, as fewer workers retired compared to the same period last year.”
In terms of the performance of other sectors which earn foreign exchange, agricultural output increased by 1.1 per cent during the first half of 2025, led by a 11.4 per cent increase in food crop production.
However, manufacturing output “dipped by 0.7 per cent in the first
half of 2025, as declines in beverage and chemical production outweighed modest gains in other subsectors”, Greenidge reported.
In the global business sector, foreign currency permit issuances rose slightly, as new entities responded favourably to the revised foreign currency permits legislation.
“Authorities issued 1 227 foreign currency permits between January and June 2025, an increase of 0.9 per cent compared to the same period in 2024,” the Central Bank boss stated.
With private investment in projects, including Royalton, Pendry, Apes Hill Villas, Coverley Residences, and new condominiums, alongside public sector infrastructure works, construction output increased by 5.8 per cent.
Greenidge said Government continued to strengthen its fiscal position during the first quarter (April to June) of fiscal year 2025/2026.
“Higher income and transaction-based tax receipts outpaced spending on wages and salaries, goods and services, transfers and subsidies, and capital investment. This performance generated a fiscal surplus of $372.9 million, equal to 2.4 per cent of GDP, and a primary surplus of $530.9 million, or 3.5 per cent of GDP,” he said.
Forecast
“Economic growth and the fiscal surplus lowered the debt-to-GDP ratio to 102 per cent, a decline of 0.9 percentage points compared to the end of fiscal year 2024/25.”
The Central Bank’s latest forecast is that “Barbados’ economy is poised to maintain a robust growth trajectory through the rest of 2025 and into the medium term”.
“The momentum in real GDP recorded between January and June this year is expected to continue into the second half, and full-year growth is projected at approximately 2.7 per cent,” Greenidge said.
“Unemployment has declined to its lowest level in recent history, reinforcing business confidence and household spending. Building on this resilience, the economy is forecast to sustain around three per cent annual growth beyond 2025, supported by tourism diversification, public and private investment in infrastructure and housing, expansion of the digital economy and targeted productivity reforms. ( SC)
The post ‘Signs’ of sustained growth appeared first on nationnews.com.