BRIDGETOWN, Barbados, CMC — The Central Bank of Barbados says the island’s economy has recorded a robust 4.5 per cent real growth in the first half of 2024, with a BD$300 million (one Barbados dollar=US$0.50 cents), year-on-year increase in total production and record employment levels.

This was revealed on Monday as Governor Dr Kevin Greenidge presented the bank’s six-month economic review during a press conference.

The governor attributed the economic expansion primarily to “strong” growth in tourism, describing it as “one of the strongest we have ever had” outside the pandemic period.

“This was the largest first-half tourism performance that we have on record. The sector grew by 18 per cent. All markets performed strongly,” Greenidge stated.

He highlighted significant increases across various markets, with the US market showing the largest growth of 45 per cent, rising from 82,000 to 120,000 tourists.

The economic growth has had positive ripple effects across various sectors. Construction grew by 7.1 per cent, benefiting from increased hotel activity and public sector projects. Manufacturing showed positive growth, with increases in food and beverage, furniture, and chemicals production. Agriculture recorded a 5.4 per cent growth, driven by chicken and fish production.

The labour market also benefited from the economic upturn, with the unemployment rate falling to 6.9 per cent in March 2024, down from 8.9 per cent in March 2023. Greenidge noted this as “the lowest first-quarter unemployment rate” in recent history, only surpassed by the 2007 performance.

Inflation has moderated, with the 12-month average rate at 2.7 per cent, down from 4.2 per cent the previous year. This was attributed to easing international commodity prices, including global energy and food prices.

The country’s foreign reserves rose by $245.4 million year to date, reaching $3.2 billion, representing 32.2 weeks of import cover. Greenidge credited this boost to tourism receipts, which amounted to a net addition of $447 million.

On the fiscal front, the Government recorded a primary surplus of $509 million and an overall surplus of just over $300 million, or 3.5 per cent of GDP. The debt-to-GDP ratio declined to 105 per cent, reflecting both economic growth and a reduction in the debt stock.

Looking ahead, Greenidge projected four per cent growth for the full year, citing strong hotel forward bookings, increased airlift capacity, and robust cruise ship performance. However, he cautioned about potential risks, including a possible pick-up in energy prices and geopolitical conflicts.

“All in all, the outlook remains pretty balanced both with upside and downside risks,” the central bank governor said.