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Caribbean & Central America - April 2011 (ISSN 1741-4458)

BARBADOS: Preparing to backslide on debt-to-GDP ratio?

The economy of Barbados contracted by 4.7% in 2009, so provisional data showing a contraction of just 0.3% in 2010 is a marked improvement. The improvement is forecast to continue by the Central Bank, with projections of 2% growth for 2011 and 3% thereafter. However, the Central Bank does not foresee any significant improvement in unemployment, which ended the year at over 11%, and it is probably this factor that has prompted Minister of Finance Chris Sinckler to warn again that the recovery will be “slow and painful". The corollary to this is that the government may lose its appetite for fiscal consolidation, and the past month has indeed seen some evidence for this.

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