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Barbados Economic Review 2008

The economic slowdown triggered by a deepening of the U.S financial crisis, spread to other advanced economies, including Barbados’ main trading partners, and contributed to a slowing in the pace of Barbados’ economic expansion in 2008.

Real output growth in the Barbadian economy increased by an estimated 0.7%, substantially lower than the 3.3% expansions registered in 2007 and 2006, respectively. This was the first year since 2002 that gross domestic product (GDP) rose by less than one percent. However, as was the case in the last five years, growth was led by the non-traded sectors, which expanded by only 1.2%, just enough to overshadow a decrease of 1.0% in the traded sectors.

Both sectors were negatively affected by a reduction in tourism output and an increase in input costs during 2008. Consequently, between January and October, the rate of inflation increased relative to the same period in 2007, while the unemployment rate at the end of September rose further from the rate observed during the first nine months of 2007.

Review Published by the Central Bank of Barbados

Full text available at the Central Bank of Barbados website