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CDB Annual Economic Review 2006 Barbados
1. RECENT ECONOMIC PERFORMANCE
A. Overview
Economic activity in Barbados was estimated to have
grown by 3.4% in real terms during 2006 compared with
growth of 3.8% recorded for 2005. Growth was recorded
for all sectors except agriculture. Unemployment
remained below 10%, while consumer prices continued
to rise above trend, in part refl ecting the impact of
rising international oil prices over the last two years.
Strong revenue growth led to a lower overall defi cit of
$24.6 mn on Central Government operations during
the fi rst nine months of 2006 compared with an overall
fi scal defi cit of $70.4 mn during the corresponding
period of 2005. Refl ecting the broad-based expansion
in economic activities, the monetary liabilities of the
banking system expanded by 6.7% or $219.1 mn
during the fi rst nine months of 2006. On the other
hand, net domestic credit grew by 8.4% or $218.1 mn;
consequently, net international reserves grew only
marginally. Net international reserves had declined in
each of the preceding two years by a total of $238 mn.
B. Sectoral Performance
Tourism A 2.2% decline in value-added from tourism
activity in 2005 was reversed in 2006 by an estimated
2.5% increase in activity. During the fi rst nine months of
2006 visitors arriving in Barbados by cruiseship declined
by 11.5%, following a 21.9% decline during 2005. The
impact of the decline in cruiseship arrivals on tourism
activity during 2006, was outweighed by 4.1% increase
in stay-over visitors. Continued changes by cruiselines
to their routes as they adjusted to higher fuel cost, led to
the decline in cruiseship arrivals. Stay-over visitors from
all major markets rose during 2006, and those from the
UK and the USA, the two largest sources, rose by 4.7%
and 3% resp