By: Staff Writer
February 3, 2026
The International Monetary Fund in their report, “Barbados: Technical Assistance Report-Climate Risk Analysis,” said that the Barbados economy continued to grow in 2024, posting a 3.9 percent expansion during the first nine months of the year, led by tourism, business services and construction activities, with tourism.
The report also said: “Barbados’ real GDP recovered to pre-pandemic levels in 2023, mainly due to the recovery in the tourism and related sectors. Following a 15.3 percent decline in 2020-21, real GDP expanded by 17.8 percent and 4.1 percent in 2022 and 2023, respectively. The recovery was driven by a rebound in tourism1 and related activities from COVID-19 lows, albeit partially offset by adverse climate conditions that affected agricultural production.
It added: “The labor market remained relatively strong despite temporary increases in unemployment claims. While employment contracted slightly in 2023, the unemployment rate declined to 7.9 percent from 8.4 percent in 2022, well below the 8.9 percent pre-pandemic level. Unemployment claims temporarily increased within 2023, due to the severance of workers under the national clean-up program and the restructuring of the Arawak Cement Plant but have recently declined with claims in Q1 2024 falling by 8.4 percent compared to Q1 2023 levels.
“Inflationary pressures moderated in 2024. Year-on-year retail price inflation fell to 4.8 percent at end-2023, from 5.7 percent at end-2022. In 2024, inflation rates continued to slow, reaching 2.4 percent in August 2024 year-on-year, down from 3.4 percent in 2023. This gradual decline was driven by the easing of global energy prices and reduce cost for transportation, communication and recreation but offset by higher domestic food prices, driven by adverse weather conditions.”
The report also said: “Barbados’ banking sector is relatively large and mainly lends to individuals and corporates.
“The banking system, together with finance companies, amounts to about 123 percent of GDP and corresponds to about 54 percent of total financial sector assets.
“There are six banks (93 percent of the sector total assets) and four finance and trust companies (7 percent of the sector total assets), at the end of 2023. All banks are universal banks, lending to both individuals and corporates.
“Finance and trust companies have a similar business model, with two of them mostly lending to individuals. Loans and advances are the main asset item, accounting on average for about 44 percent of total assets at the end of 2023, with slightly more than half of it reflecting loans to households and the rest to corporates and other sectors.
“The remaining assets are composed of investments (19 percent), deposits with the central bank and other financial institutions (22 percent of assets, mainly compulsory reserve requirements) and other assets (15 percent).”