Prime Minister Mia Amor Mottley speaking during the COVID-19 update on Monday, February 15, 2021, at Ilaro Court. (Photo: Prime Minister's Office)

Barbados economy set to lose $150 million — PM Mottley

Prime Minister Mia Amor Mottley speaking during the COVID-19 update on Monday, February 15, 2021, at Ilaro Court. (Photo: Prime Minister's Office)

Prime Minister of Barbados Mia Amor Mottley shared on Monday that the country’s economy stands to lose BD$150 million from reduced economic activity this month due to a national lockdown.

While addressing the nation on issues pertaining to COVID-19, the impact of the disease on the economy and the vaccine, among others, the prime minister said she had met earlier that day with her finance and economic team to ascertain if the country could withstand an extension of the period of national pause.

An aerial view of Bridgetown, the capital of Barbados (Photo: businessinsider.com)

“The simple answer from the finance and economic team is yes, that we will be hurt by any further extension, but it will not kill our economy, and it will not collapse our economy…. The advisors have indicated to me that it is likely that we will come in at just under [BD]$78 million for…this first part of the lockdown in terms of loss of economic activity,” Mottley explained.

She added: “If we go for an additional period of time, just under two weeks, then the most that will be is probably another [BD]$70 million or [BD]$75 million, so that we are potentially looking at a loss of [BD]$150 million in economic activity for the month of February. But by the same token, it is less than we would have incurred last year.”

At present the Central Bank of Barbados has $2.6 billion in foreign reserves, the equivalent of more than 30 weeks of imports.

The Central Bank of Barbados in the country’s capital, Bridgetown. (File photo)

Meeting financial obligations

Over the weekend, the prime minister said, she had extensive discussions with officials in this region and hemisphere, including the International Monetary Fund. 

In addition, she has implored Minister in the Ministry of Finance Ryan Straughn to work with the Financial and Economic Committee to meet with the banks and non-banking financial sector to address retail and commercial mortgages, as well as loans.

Minister in the Ministry of Finance Ryan Straughn, at the request of Prime Minister Mia Mottley, will meet with the Finance and Economic Committee. (Photo: GIS Barbados)

“I have said to Minister Straughn, we need to meet with the financial sector and to ensure that we can put in place arrangements that will allow people to have their heads above water, and to be able, as far as possible, to continue to service their loans and debt obligations, even if it means reprofiling much of it, because of the protracted period of time that we have had to deal with this fight with COVID…” Mottley outlined.

“I have also asked Minister Straughn to have a conversation with the utility companies too, to ensure that for those persons whose cash flow is negatively affected that some kind of arrangements can be put in place over a three or four-month period, rather than being forced to pay everything in one month, where no revenue is coming in,” she continued.

Cross-sectoral support

During the extended “national pause”, Mottley pointed out, there will be an extension of support to those currently receiving assistance, particularly shop owners, vendors and farmers. At the same time, officials will meet stakeholders in the fishing sector to ascertain how best the Government can assist them.

On a positive note, she said there are “green shoots of economic recovery globally and we must have the confidence in the plan domestically to assure success”.

While the tourism sector continues to reel from national lockdown in Europe, manufacturing — both for export and local consumption — continues to improve. Likewise, the agricultural sector’s output grew in 2020.

Manufacturing and agricultural output continues to grow (Photo: GIS Barbados)

The prime minister also disclosed that last week Government met and agreed on the framework and draft Bill that will go to Cabinet for formal approval, for the establishment of a free trade zone in Barbados.

Once the island’s positivity rate begins to decline, Mottley explained, Government will be able to aggressively resume the capital works programme.