Barbados WT/TPR/S/203/Rev.1 
 Page 1 
 
 
I. ECONOMIC ENVIRONMENT 
(1) OVERVIEW  
1. Barbados' economy is dominated by the services sector;  the main activities are finance and 
business, wholesale and retail trade, and tourism.  In  contrast, the economic importance of agriculture 
is small and has continued to fall.  International trade has played a critical role in the development of 
the Barbados economy, with total trade in goods and services representing some 133% of GDP 
(2006).  This has contributed to Barbados mainta ining some of the highest per capita incomes and 
human development indicators among developing countries. 
2. The Barbados economy experienced a recessi on in 2001-02 but subsequently performed well 
on a number of counts.  Real GDP expanded at an  annual average rate of 3.9% between 2002 and 
2007.  Unemployment has fallen, although it remains relatively high, at 7.4% in 2007.  Inflation 
appears to have been curbed (to 4.1% in 2007), af ter increasing from 0.2% in 2002 to 7.3% in 2006.  
The increase in inflation in 2006/07 was mainly as a result of higher oil and food prices, domestic 
demand pressures and higher import taxes.  Inflatio nary pressures, combined with Barbados' fixed 
exchange rate regime, have led to a slight appreciation of the real effective exchange rate.  The fixed 
exchange rate means that counter-c yclical policies must largely rely on fiscal instruments, but the use 
of these is limited by persistent fiscal  deficits and high public debt. 
3. The current account of the balance of payments h as shown a persistent large deficit, 9.7% of 
GDP on average during 2002-07, as the surplus of th e services account has not offset the merchandise 
trade deficit.  The current account deficit has generally been compensated by public and private 
capital inflows.  Merchandise trade has expande d rapidly amounting to some 65% of GDP.  
Merchandise exports are just under one fourth of  exports of goods and services;  in contrast, 
merchandise imports account for 80% of total imports  (2006).  Exports of services consist mostly of 
tourism and financial services. 
(2) MACROECONOMIC DEVELOPMENTS  
(i) Economic structure, production, and employment 
4. In 2007 Barbados' GDP was BDS$6.8 billion (US $3.4 billion) at current market prices.  
Following a recession in 2001-02 the economy experienced solid growth, with GDP growing at an average real rate of 3.9% over 2002-07.  The pace of growth has increased in recent years, reaching 
4.3% over 2004-06.  Growth has largely been driv en by personal consumption and, since 2005, a 
surge in private building activity (Table I.1). 
5. In 2007, Barbados' GDP per capita (current ma rket prices) was estimated at just over 
US$12,400, up from US$9,125 in 2002 (Table I.1).  In terms of purchasing power, GDP per capita 
was estimated by the IMF at US$12,523 in 2006, up from US$9,700 in 2000, as reported in Barbados' previous review.
1  Barbados has succeeded in bringing down unemployment to an estimated average 
of 7.4% in 2007.2  This compares to an average rate of 11.1% over the period 1997-2002.3  T h e  
UNDP has classified Barbados as having a high level of human development, ranking it in 31st place 
                                                      
1 IMF (2007).  Viewed at:  h ttp://www.imf.org/external/pubs/ft/scr/2007/cr07315.pdf, and WTO 
document WT/TPR/S/101, 10 June 2002. 
2 Government of Barbados (2008). 
3 Government of Barbados (2006), Appendix 20. WT/TPR/S/203/Rev.1 Trade Policy Review 
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out of 177 countries, based on a range of indictors.   Barbados has high leve ls of education, life 
expectancy, and GDP per capita.4 
Table I.1 
Basic macroeconomic indicators, 2001-07 
 2001 2002 2003 2004 2005 2006 2007a 
Gross domestic product        
GDP at market prices (current) 
(BDS$ million) 5,108.4 4,952.2 5,389.3 5,634.3 6,011.1 6,501.1 6,818.4 
GDP (constant market prices) 
(BDS$ million) 948.0 954.4 973.9 1,021.4 1,063.7 1,104.9 1,154.3 
GDP growth (real) (%) -2.6 0.7 2.0 4.9 4.1 3.9 4.5 
Per capita GDP (current market prices) 
US$ per person .. 9,125 9,898 10,341 11,009 11,888 12,411 
Breakdown by expenditure (% of GDP)        
Consumption expenditure 84.4 85.1 85.6 87.3 83.8 77.9 69.9 
of which private 62.0 60.5 62.4 66.0 62.3 57.0 49.4 
of which public  22.4 24.6 23.2 21.3 21.5 20.9 20.5 
Gross fixed capital formation  19.6 20.8 20.7 23.7 24.8 26.4 28.3 
of which public building activity 2.3 3.4 2.2 1.1 0.9 0.9 1.0 
of which private building activity 7.8 7.2 7.8 9.6 11.9 12.0 11.3 
of which other 9.5 10.2 10.7 12.9 12.1 13.5 16.0 
Exports of goods and services 51.2 50.9 51.1 52.4 58.1 63.7 65.6 
Imports of goods and services -55.2 -56.8 -57.4 -63.4 -66.8 -68.3 -63.9 
 
.. Not available. 
 
a Provisional.  
Source : Government of Barbados (2006), Barbados Economic and Social Report 2006  (Table 5.3-2, Appendices 1, 3, 
 and 4);  and Government of Barbados (2008), Barbados Socio-Economic Data , 2008 Pocket Statistics . 
6. As noted in the previous Review of Barbados , changes in the country's GDP growth tend to 
be closely associated with fluctuations in tourist arrivals.  This trend has continued over the period 
under review.  Historically the economy has been vul nerable to external shocks, as witnessed by the 
depth and duration of recessions in Barbados duri ng periods of slow global economic growth.  
Barbados' capacity to adopt counter-cyclical polic ies during such periods remains constrained by a 
fixed exchange rate regime and the need to manage the fiscal deficit. 
7. The most economically important commercial sectors have been finance and business, 
followed by wholesale and retail trade, then touris m.  All sectors, except mining and quarrying and 
sugar, grew on average, over the period 2002-07.  Pa rticularly strong overall growth was posted for 
construction, transport, storage and communi cations, as well as wholesale and retail trade. 
8. The major sources of employment in Barbados are general services and government services.  
Over the review period, there has been steady growth  of employment in general services, with a slight 
tail-off estimated in 2007, while other sources of  employment have fluctuated (Table I.2). 
                                                      
4 UNDP (2007). Barbados WT/TPR/S/203/Rev.1 
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Table I.2 
Sectoral data on GDP and employment, 2001-07 
 2001 2002 2003 2004 2005 2006 2007a 
GDP sectoral breakdown 
(% of GDP at current market prices)        
Agriculture – sugar 1.0 0.5 0.7 0.8 0.9 0.7 0.5 
Agriculture (excluding sugar) and 
fisheries  2.8 2.6 2.9 2.1 2.1 2.0 1.8 
Mining and quarrying 0.5 0.6 0.6 0.6 0.7 0.8 0.7 
Manufacturing 5.0 5.3 5.4 5.6 5.3 5.5 5.1 
Electricity, gas and water 2.7 2.8 2.7 2.6 2.8 3.0 3.0 
Construction 4.3 4.6 4.3 4.6 5.5 5.6 5.2 
Wholesale and retail trade 13.7 14.3 13.7 14.3 14.8 13.7 13.3 
Tourism 9.2 9.0 9.5 9.3 9.5 9.4 11.2 
Transport, storage and communications 8.7 6.0 5.4 5.7 5.5 5.1 5.0 
Finance and business 15.6 16.0 15.7 16.5 16.7 17.9 15.8 
General services 4.1 4.3 5.1 5.5 5.4 5.9 6.0 
Government services 15.2 16.2 14.5 14.0 13.7 13.1 14.2 
Net taxes 17.1 17.9 19.6 18.3 17.2 17.2 18.3 
Sectoral breakdown:  real growth rates        
Agriculture – sugar -14.7 -9.8 -19.2 -5.1 10.8 -11.6 0.0 
Agriculture (excluding sugar) and 
    fisheries -5.8 -0.6 4.7 -8.2 6.8 -2.9 4.5 
Mining and quarrying -10.5 6.4 -16.0 9.5 8.7 -3.0 -7.2 
Manufacturing -9.8 1.0 -1.6 2.1 2.1 1.1 0.0 
Electricity, gas and water 4.3 3.6 2.9 1.8 2.0 6.8 7.5 
Construction 6.8 7.7 0.6 2.8 13.4 6.9 5.1 
Wholesale and retail trade -3.2 1.2 4.1 6.1 5.3 5.3 5.9 
Tourism -5.9 -2.8 7.0 9.4 -2.3 1.6 3.3 
Transport, storage and communications 0.4 -3.3 4.2 6.2 5.6 5.7 5.6 
Business and general services -0.7 -2.3 4.4 4.3 4.5 5.3 5.1 
Government services -1.6 6.4 -3.7 5.6 3.5 3.0 2.9 
Employment: sectoral breakdown 
(% of total employment)        
Agriculture (including sugar) and 
   fishing 4.2 4.1 4.6 3.3 3.4 3.6 3.1 
Construction and quarrying 11.0 10.3 9.5 10.2 10.0 11.1 11.6 
Manufacturing 7.1 7.0 6.1 5.8 5.3 4.2 4.7 
Electricity, gas and water 1.5 1.5 2.0 1.4 1.6 1.8 1.5 
Wholesale and retail trade 14.8 15.3 15.2 14.9 14.0 12.8 13.6 
Tourism 10.6 11.1 10.8 9.3 9.7 10.3 10.5 
Transportation and communication 4.4 3.7 3.7 4.0 4.3 3.4 3.9 
Financial services 8.1 8.5 7.0 8.2 8.2 7.5 7.2 
General services 17.8 17.0 19.5 22.0 22.3 24.5 23.8 
Government services 20.4 21.6 21.6 20.9 21.3 20.8 19.8 
 
a Provisional. 
 
Source : Government of Barbados (2006), Barbados Economic and Social Report 2006  (Table 3.5-1 Appendices 1 and 4);  
 and Government of Barbados (2008), Barbados Socio-Economic Data, 2008 Pocket Statistics . 
(ii) Fiscal policy 
9. As reported in Barbados' previous review, fiscal deficits have, in the past, constituted a source 
of financial instability for Barbados.  Government po licy over the review period was to try to keep the 
fiscal deficit under -2.5% of GDP (a policy target set in the early 1990s).  As noted by the authorities, 
a new policy is to target a fiscal deficit below 1.5% of GDP. 
10. The Government of Barbados has continued to  run fiscal deficits during the period under 
review.  In FY2001/02, the Government had s ubstantially increased capital expenditure and 
subsequently also faced a drop in current revenue as a result of the economic slowdown.  The largest 
deficit posted was in 2002/03, when  it reached 5.4% of GDP.  Following this the Government 
succeeded in keeping the deficit under 2.5% of GDP for most of the period between 2003/04 and WT/TPR/S/203/Rev.1 Trade Policy Review 
Page 4 
 
 
2006/07.  Since 2002/03 government revenue has grow n year-on-year.  Current expenditure grew 
year-on-year from 2001/02 to 2006/07, while capital expenditure decreased between 2001/02 and 2004/05 and increased slightly thereafter (Table I.3). 
11. In 2006/07, the Government recorded a fiscal deficit of BDS$131.3 million, significantly 
higher than in 2005/06 (BDS$78.5 million).  The authoriti es have attributed this to slower growth in 
tax revenue and a faster increase in current expenditure.
5  ECLAC has noted that among the 
contributing factors to expenditure growth are in creases in:  the public sector wage bill;  current 
transfers and pensions;  and spending associated with  the Cricket World Cup and payments related to 
the Harrison's Cave Redevelopment project.6 
12. Central government revenue relies mostly on ta x receipts, which accounted for 97% of total 
revenue in 2006/07.  The Government's main sour ces of tax revenue are taxes on income and profits 
and on goods and services.  With respect to the latter, the VAT accounted for 73% of taxes on goods 
and services in 2006/07 and excise taxes accounted  for 16%.  The VAT is the main source of 
government revenue.  Taxes on international trad e (tariffs only) amounted to 7.8% of total 
government revenue in 2006/07.  The environmental levy, applied only on imports, is estimated to 
have contributed BDS$16 million to  government revenue in 2006/07 (0 .7% of government revenue). 
13. The Government's main expenses are on wages (BDS$637.1 million in 2006/07), and on 
subsidies and transfers (BDS$821.4 million in 2006/07)7 (Table I.3).  As noted by the authorities 
these subsidies and transfers corresponded to:  transfer s to public corporations;  the University of the 
West Indies;  pensions;  transport subsidies for sen ior citizens, persons with disabilities and students;  
transfers for persons with disabilities and students;   welfare grants;  and grants to non-profit 
organizations). 
Table I.3 
Central government operations, FY2001/02 to 2006/07 
(BDS$ million) 
 FY2001/02 FY2002/03 FY2003/04 FY2004/05 FY2005/06 FY2006/07 
General government finance       
Current revenue 1,722.2 1,716.3 1,865.7 1,897.4 2,143.0 2,223.4 
Tax revenue 1,644.2 1,636.9 1,793.5 1,836.2 2,075.1 2,155.3 
of which       
taxes on income and profits 571.4 604.7 596.5 621.3 706.2 804.7 
taxes on property 102.6 95.7 106.0 112.9 137.4 151.2 
taxes on goods and services 749.5 718.7 835.1 837.9 959.9 939.3 
taxes on international trade 146.3 160.1 194.1 193.0 180.5 173.8 
environmental levy 11.3 12.1 13.5 14.2 16.0 16.0 
Current expenditure 1,791.7 1,914.4 2,059.8 2,154.8 2,272.2 2,517.1 
of which       
wages and salaries 591.3 625.3 562.6 584.1 620.9 637.1 
subsidies and transfers 490.6 521.0 672.1 716.8 782.1 821.4 
Current surplus/deficit -69.5 -198.1 -194.1 -257.4 -129.2 -293.7 
Capital expenditure 348.0 325.6 254.3 226.1 253.1 257.0 
Overall fiscal balance -192.7 -282.0 -128.4 -145.0 -87.2 -131.3 
Surplus/deficit (% of GDP) -3.7 -5.4 -2.4 -2.6 -1.4 -1.9 
Table I.3 (cont'd) 
 
                                                      
5 Central Bank of Barbados (2007b). 
6 ECLAC (2007). 
7 Government of Barbados (2006b), Appendix 13. Barbados WT/TPR/S/203/Rev.1 
 Page 5 
 
 
 2001 2002 2003 2004 2005 2006 
Central Administration public 
debt (BDS$ million) 3,694.6 3,954.0 4,065.7 4,227.5 4,900.3 4,907.3 
Central Administration public 
debt (% of GDP) 72.3 79.8 75.4 74.9 79.2 71.5 
Government Guaranteed Debt  
(BDS$ million) 404.9 478.4 561.8 630.0 892.7 1,216.2 
Government Guaranteed Debt (% 
of GDP) 7.9 9.7 10.5 11.2 14.4 17.7 
Total debt (both central 
administration and government 
guaranteed debt) (% of GDP) 80.2 89.5 85.9 86.1 93.6 89.2 
 
Source: Financial data provided by the author ities; and debt data provided by the Central Bank of Barbados (2006) 
 Annual Report,  (pp. 20 & 21).  
14. Government debt has fluctuated during th e period under review, but remains high at 
BDS$4.9 billion or 71.1% of GDP at end 2006.  This figure increases to 89.2% of GDP if the 
government guaranteed debt of public entities is also  included.  Most of government debt (68% in 
2006), is domestic (Table I.3).  According to th e IMF, the Government is committed to fiscal 
consolidation, and has set a target to reduce govern ment debt to less than 60% of GDP by 2012.  In 
this regard the IMF has recommended that the G overnment adopt a package of measures as a matter 
of urgency while good economic condi tions prevail.  The former Government, however, had been in 
favour of a more gradual approach, and was, inter alia,  looking to reduce capital expenditures by 
developing private-public part nerships for the provision of infrastructure and services. 
(iii) Monetary and exchange rate policy 
15. Monetary policy is carried out by the Centra l Bank of Barbados (CBB).  The main objective 
of monetary policy is maintaining the exchange rate 's fixed parity with the U.S. dollar, and thus a 
sufficient level of foreign exchange reserves.  Other objectives include promoting monetary stability 
and a sound financial structure, developing mone y and capital markets, and maintaining credit and 
exchange conditions that foster development.  
16. For the implementation of monetary policy the Central Bank relies mainly on the modification 
of short-term interest rates, the setting of rese rve requirements, and the bank rate on short-term 
liquidity loans to commercial banks:  commercial ba nks must hold 6% of foreign deposits and 5% of 
domestic deposits in cash reserves, and 10% of de posits in government securities (reduced from 12% 
in 2007). 
17. Higher oil prices, domestic demand pressures, higher applied tariffs (of 60%) on imports of 
certain manufactured goods, and the imposition of a ce ss tax (see Chapter III(2)(v)), contributed to 
pushing up inflation significantly from 0.2 % in 2002 to 7.3% in 2006 (Table I.4).8  Price rises were 
recorded for all categories of goods and service s, except for clothing and footwear, but were 
particularly steep for food, housing, medical and pers onal costs, fuel, lighting and transportation.  The 
Government had indicated its intention to keep the inflation rate within reasonable limits and in this 
regard it reported in March 2007 th at it had removed the cess tax at end February 2007 and reduced 
applied tariffs (from the 60% rate) on products not pr oduced locally.  In 2007, the average rate of 
inflation was 4.1% attributable in pa rt to a slowing gr owth in oil prices.9 
                                                      
8 Government of Barbados (2007) and information provided by the authorities. 
9 Central Bank of Barbados (2007b). WT/TPR/S/203/Rev.1 Trade Policy Review 
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Table I.4 
Main monetary indicators, 2001-07 
Monetary aggregates 2001 2002 2003 2004 2005 2006 2007a 
M1 (% annual variation) 4.3 44.4 5.6 18.5 11.3 -3.5 20.5 
M2 (% annual variation) 5.3 12.8 7.0 15.5 9.7 8.1 15.3 
Interest rate (% per annum)         
Treasury bills 1.97 1. 51 0.64 2.76 5.84 6.49 4.9 
Prime lendingb 7.25 6.75 6.75 6.50 9.15 9.65 9.8 
Savings rate .. 2.50 2.50 2.25 4.75 4.75 4.8 
Inflation rate 2.8 0.2 1.6 1.4 6.1 7.3 4.1 
Exchange rates        
Exchange rate (domestic currency/U.S. 
dollar) 2.0 2.0 2.0 2.0 2.0 2.0 2.0 
Real effective exchange rate (average)c .. -2.4 -4.6 -5.2 1.3 3.8 .. 
 
.. Not available. 
 
a Provisional. b Minimum rate. 
c (-) Reflects a depreciation. 
 
Source:  Government of Barbados (2006), Barbados Economic and Social Report  (Appendices 15, 19 and 21);  
 IMF (2007), Article IV Consultation;  IMF (2006), Article IV Consultation;  and Government of Barbados (2008), 
 Barbados  Socio-Economic Da ta, 2008 Pocket  Statistics . 
18. Monetary policy is carried out under the framewo rk of a fixed exchange rate system with the 
U.S. dollar.  The Barbados dollar is pegged to the U.S. dollar at BDS$2 per US$1.  In 2007, the IMF 
noted that Barbados' real effective exchange rate ha s been broadly in line with fundamentals but that a 
slight overvaluation in recent years could be of con cern if inflation remained above that of partner 
countries without a corresponding improvement in fundamentals.10 
19. Barbados' exchange system is free of restrictions on the making of payments and transfers for 
current international transactions.11  However, capital account restrictions remain in place.  As noted 
in Barbados' previous Review, purchases of all secu rities abroad by residents require exchange control 
approval.  Earnings on these securities must be repa triated and surrendered to an authorized dealer.  
All credit operations, as well as direct investments,  also require exchange control approval.  
Liquidation of proceeds of direct investments is  permitted, provided that evidence is submitted 
documenting the validity of the remittance, all li abilities related to the investment have been 
discharged, and the original investment was registered  with the CBB.  Barbados is obliged, as a result 
of its participation in the CARICOM Single Mark et and Economy to liberalize the capital account 
vis-à-vis  other CARICOM countries, and the authorities confirm that the purchase and sale of equities 
have been liberalized.  As noted by the IMF, the i mmediate impact of capital account liberalization is 
not expected to be large, however, there are medium -term risks to external stability and the dollar peg.  
In this regard three areas were identified as critical  for successful capital account liberalization:  fiscal 
consolidation in order to redu ce external current account imbalances and high public debt;  the 
development of market-based monetary policy instru ments;  and effective financial sector regulation 
and supervision.12  Barbados has no further plans to liberalize capital controls vis-à-vis  non-
CARICOM countries. 
                                                      
10 IMF (2007). 
11 IMF(2007). 
12 IMF (2007). Barbados WT/TPR/S/203/Rev.1 
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20. Commission rates are set at 0.125% and 1.75%, respectively, for buying and selling the U.S. 
dollar, and 0.1875 and 1.8125%, respectively, for buying and selling the Cana dian dollar, euro, and 
pound sterling.13 
(iv) Balance of payments 
21. Exports and imports of goods and services amounted  to 133% of GDP in 2006.  Barbados has 
sustained a significant current account deficit over th e period under review (Table I.5), with major 
increases since 2004.  A surge in imports over this period was the result of a rapid increase in private 
sector credit as well as an expansion in economic activity.14 
Table I.5 
Balance of payments, 2001-07 
(US$ million) 
 2001 2002 2003 2004 2005 2006 2007a 
Current account balance        
Visible trade (exports-imports) -691.6 -711.8 -803.4 -962.0 -1,014.9 -1,179.6 -1,259.4 
Exports 273.2 255.3 275.7 315.6 432.2 464.8 434.6 
Imports 964.8 967.0 1,079.1 1,277.6 1,447.0 1,644.3 1,694.0 
Services (net) 559.2 536.8 632.5 647.5 761.5 848.9 913.1 
Income (net) -82.0 -88.0 -92.2 -107.3 -151.7 -108.0 -190.8 
Current transfers (net) 93.9 86.3 92.9 86.2 96.6 106.4 107.1 
Current balance (trade + services + income + 
current transfers) -120.5 -176.8 -170.3 -335.7 -308.5 -332.2 -430 
Capital and fina ncial account         
Balance 290.0 231.0 322.2 175.3 314.8 366.3 .. 
Direct investment 17.5 17.0 57.8 -16.0 52.9 77.7 .. 
Portfolio investment -21.9 -23.8 -23.1 -32.2 -87.5 20.6 .. 
Other investment 293.1 237.8 287.5 223.5 349.4 268.1 .. 
- Public sector 147.7 -17.5 85.0 -49.5 124.6 51.5 .. 
- Trade credits 9.0 62.8 79.1 197.2 198.1 -120.0 .. 
- Deposits in overseas 
  banks -9.8 -2.5 -5.4 -3.8 -20.0 -6.0 .. 
- Other 146.3 195.0 128.8 79.6 46.8 342.7 .. 
Errors and omissions 57.2 34.3 36.1 -9.9 -75.4 7.3 .. 
Balance for official financing 226.6 88.6 187.9 -170.3 -69.1 41.4 .. 
Official financing transactions 0 0 0 0 0 0 .. 
Change in reserves (CBB basis) -226.6 -88.6 -187.9 170.3 69.1 -41.4 .. 
 
.. Not available. 
a Provisional. 
Sources:  Central Bank of Barbados (2007), Balance of Payments of Barbados ;  and Government of Barbados (2008), 
 Barbados Socio-Economic Da ta, 2008 Pocket Statistics . 
22. The capital and financial account balance has been continuously in surplus, although 
fluctuating, during the period under review, with a significant drop in 2004.  This reduced surplus 
resulted from the cessation of privatization receipts from abroad.15 
                                                      
13 IMF (2006). 
14 IMF (2005). 
15 IMF (2005). WT/TPR/S/203/Rev.1 Trade Policy Review 
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(3) TRADE FLOWS  
(i) Developments in merchandise trade 
23. During 2002-06, total merchandise trade grew on average at 14.3% per year, with strong 
growth of both exports and im ports.  In 2006, Barbados' main  exports of manufactured goods 
(excluding processed food and beverages) were:  me dicaments; radio/TV transmission apparatus;  
electrical resistors;  cement;  jewellery;  and in secticides.  Notable trends on the export side have 
included a marked decline in 2005 and 2006 in the va lue of exports of sugar, and, over the same 
period, an increase in the value of mining products and fuels.16  Over the review period, exports of 
manufactures have fluctuated only slightly, showin g no clear trend, with the exception of a gradual 
increase in exports of radio and TV transmission a pparatus (Table AI.1).  Over the same period, 
significant shifts in import patterns have included:  a significant increase in the value of imports in 
2005 and 2006, compared with the preceding four year s;  a reduction in the share of food imports in 
total imports for 2005 and 2006, and an incr ease in the share of fuels (Table AI.2). 
24. Other CARICOM countries (in particular Trinidad  and Tobago and to a lesser extent St. Lucia 
and Jamaica) were the main destin ations for just under 40% of Barb ados' exports.  The United States 
remains an important export destination, and has absorbed between 13% and 20% of Barbados' annual 
exports since 2002.  The share of Barbados' exports  to the United Kingdom has tended to decrease:  
the United Kingdom was the destination for 7.5% of  Barbados' exports in 2006 (Table AI.3). 
25. The United States continues to be the main sour ce of imports into Barbados, accounting for a 
38% share in 2006, followed by Trinidad and Tobago (22.5%), and the United Kingdom (5.8%).  
Whilst the share of imports from the United States and Trinidad and Tobago in total imports has 
tended to fluctuate since 2002, imports from the United Kingdom have shown a gradual decline 
(Table AI.4). 
(ii) Trade in services 
26. Tourism, as reflected in travel receipts, conti nues to be the mainstay of Barbados' economy 
and its most important services export.  Travel receipts increased steadily over the period under 
review, from nearly US$700 million in 2001 to US$967 million in 2006.  The only year that did not 
see year-on-year growth was 2002 (Table I.6).  Fina ncial services remains the second largest source of 
services export revenue, and experienced particularly  high export growth in 2005 and 2006.  Barbados 
is a significant importer and exporter of insurance services. 
27. Transportation is the only services sector where Barbados' imports exceed exports;  for the 
most part accounted for by imports of passengers by air, and freight by sea. 
                                                      
16 Barbados' mineral resources include petroleum, natural gas, and the industrial minerals limestone, 
sand, and clays.  Oil and gas reserves at end 2006 were, respectively:  2.5 billion barrels of crude, and 
5.3 million cubic feet of gas. Barbados WT/TPR/S/203/Rev.1 
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Table I.6 
Trade in services, 2001-06a 
(US$ million) 
 2001 2002 2003 2004 2005 2006 
Transportation       
Credits 22.4 21 23.2 26 25.4 27.5 
Sea transport 4.3 3.5 3.6 8.1 7.2 7.3 
Air transport 3.9 3.5 3.8 3.6 3.9 3.9 
Other transport 14.2 14 15.8 14.3 14.3 16.3 
Debits 156 155.3 169.9 197.5 218.4 225.4 
Sea transport 85.7 85.7 95.7 113.1 128.4 130.3 
Air transport 70.3 69.6 73.6 83.8 89.3 94.4 
Other transport 0.0 0.0 0.6 0.6 0.7 0.7 
Balance -133.6 -134.3 -146.7 -171.5 -193 -197.9 
Tourism (travel receipts)       
Credits 697.2 657.9 757.85 775.5 896.75 967 
Business 2.5 2.3 2.9 3.3 3 6.1 
Personal 694.7 655.6 755 772.3 893.8 961 
Debits 100.9 99.0 104.5 107.8 95.7 104.5 
Business 33.7 32 32.6 32.6 27.4 30.8 
Personal 67.2 67 71.9 75.2 68.3 73.7 
Balance 596.4 58.9 653.4 667.8 801.1 862.5 
Insurance       
Credits 84.9 87.3 90.1 91.0 143.2 153.5 
Debits 117.4 119.1 123.1 121.1 194.1 196.2 
Communication       
Credits 29.4 30.9 32.2 32.3 32.5 30.6 
Debits 9.4 9.7 11.2 12.5 11.8 11.3 
Management fees       
Credits 17.9 18.5 19.9 21.4 17.3 27.1 
Debits 13.0 13.3 10.1 10.1 20.5 33.5 
Financial services       
Credits 71.0 70.0 73.6 79.7 117.1 135.2 
Debits 5.2 5.8 5.3 5.5 5.8 5.6 
Computer and information services       
Credits 17.5 17.6 18.1 19.9 22.7 20.6 
Debits 5.7 5.7 6.9 7.3 8.2 5.7 
Merchanting and other trade related 
services       
Credits 34.8 36.4 39.9 41.9 50 20.1 
Debits 13.1 13.4 11.7 11.7 15.3 17.4 
Other services       
Credits 57.5 63.8 69.1 84.1 105.7 127.9 
Debits 50.5 44.45 49.7 45.4 66.1 36.8 
 
a Data not available for 2007. 
 
Source:  Central Bank of Barbados (2007), Balance of Payments of Barbados , Tables 6, 7 and 9. 
(4) OUTLOOK  
28. The IMF projects slowing GDP growth in 2008, a further curbing of inflation, as well as a 
decline in both exports and imports of goods and ser vices, thereby entailing no significant change to 
the current account balance, projected to be -8.5 % of GDP in 2008.  An improvement in the fiscal 
balance, (-1.0% in 2008) is forecast.  This is  based upon projected slight decreases in current 
expenditure and capital expenditure an d net lending.  Public sector debt is projected to remain high at 
89% of GDP.17 
29. Since Barbados is highly dependent on touris m, particularly from the United States and the 
United Kingdom, its economic prospects are likely to be affected by developments in these countries, 
which as at end April 2008 were uncertain in the wake of economic turbulence generated by the sub-
prime crisis. 
                                                      
17 IMF (2007). WT/TPR/S/203/Rev.1 Trade Policy Review 
Page 10 
 
 
30. The Central Bank of Barbados expects GDP to grow between 2.5% and 3.0% in 2008.  The 
external current account will probably worsen sligh tly during 2008 with retained imports forecast to 
grow moderately given the rise in prices of food a nd fuel as well as the antic ipated rise in demand for 
capital equipment.  On the other hand, domestic e xports are expected to expand marginally.  The 
central government fiscal balance is expected to remain at levels si milar to 2007 as higher revenue is 
likely to be outweighed by rising capital expenditure .  The authorities note that the biggest challenge 
during 2008 is likely to be containing the rate of in flation, which is expected to increase, dictated by 
trends in the international prices of oil and ot her commodities, including food.  They note that 
inflation could be contained if oil prices and other commodity prices on the international market are 
moderate.  However, inflation could worsen if wa ge increases are not held within reasonable limits.