Upward onward: Bajan excellence 2030
Economic overview (continued)
Inflation and employment
The unemployment rate stood at 7.1% as at September 2022 down from 10.9% for the same
period in the prior year. This decline coincided with the recovery in tourism, wholesale, retail,
and construction activity which boosted employment opportunities.
The inflation rate increased significantly to 8.5% at the end of November 2022 compared to
2.7% in prior year. This rise is due to supply chain issues which started in 2021 and continued
which resulted in price increases in mainly food, shipping and freight costs in the first half of the
year. Prices subsequently declined in the latter half of the year as production increased to meet
demand.
The Russia-Ukraine conflict, which began in February 2022 resulted in price increases in oil and
gas. Prices surges in oil and energy have a rippling inflationary effect throughout the economy.
Government debt
Gross Central Government debt expanded by BBD$706.5m (5.3%) in 2022 due to increases
in long term Central Bank bonds, Bilateral debt, commercial loans and IMF (budget support)
debt.
As at December 2022, the gross public sector debt stood at approximately BBD$14.1bn or
123.8% of Gross Domestic Product (GDP), a decline from 137.9% in the prior year.
Foreign exchange reserves
International reserves decreased by BBD$288m to BBD$2.78bn at the end of 2022,
equivalent of approximately 29.0 weeks of import cover.
Debt service outflows rose 32.4% and contributed to an overall lower foreign exchange
position. Contributing to the negative change in the foreign exchange position was the
increase in imports which was partially inflation driven, as Barbados experienced higher food
and energy prices and there was also increased economic activity.
BDS (Millions)
Inflation rate (%)
9.0%
Inflation
8.0%
7.0%
6.0%
4.2%
5.0%
3.7%
3.5%
4.0%
2.7%
3.0%
2.0%
1.0%
0.0%
2018
2019
2020
8.5%
2021p
2022e
Source: Central Bank of Barbados, p - provisional, e - estimated
International Reserves & Weeks Cover
3,500
3,000
2,500
2,000
1,500
1,000
500
45
40
35
30
25
20
15
10
5
0
2018
2019
2020
2021p
2022e
International Reserves ($Million) International Reserves Cover (Weeks)
Source: Central Bank of Barbados, p- provisional, e - estimated
Weeks
PwC | 2023/24 Budget review | Barbados
19View entire presentation