Is Economic Growth Truly Fair to All?

I’ve long had massive misgivings when it comes to key economic data, particularly concerning the headline numbers highlighted in Barbados. What seems to be well known is that economic growth never spreads fairly, regardless of the economic model applied. I still recall the evening my father met me with anger after the launch of a quarterly Central Bank of Barbados publication just about 21 years ago. He could not believe that I had taken part in a report suggesting that the economy was all well and good, while his own eyes, those of a police officer, saw something quite different.

Some of you might not remember, but we were still feeling the negative effects of the 9/11 terrorist attacks in the United States. Tourism had slipped, but what held the economy together was a massive drive into construction projects. Those were geared towards the Cricket World Cup tournament and final. I remember seeing the growing number of BMW 5 Series and 7 Series vehicles on the roads then. To my young eyes, things may have seemed better until I got home at night.

I grew up lower middle class, but lived in a village split between poverty and “my class”. We were tightly integrated, with the exception of one family that had real wealth. I believe to this day that the division was purely on religious grounds. Otherwise, we children from all parts played with one another. We still get on extremely well. That village grounds my understanding of the economy to this day. Back then, however, I was still wrestling with where the theory taught to me should meet the reality experienced by all concerned.

I strongly believe that small societies, especially economically imbalanced ones, should track more than headline variables like GDP. There are some details that present a clearer picture, and government should be able to track them. These include the time taken to process welfare payments, growth in personal income taxes against claims on national insurance, and the employment rate. In its drive to gather more private sector data, government could also focus on arrears trends and present those aggregates. It is through this kind of information that meaningful interventions into poverty alleviation can be made.

This past Thursday, I witnessed the changing face of dereliction in our growing economy. It is not buildings I am even referring to. Imagine the clarity, or better yet, the update of my economic viewpoint as I drove past the abandoned Trimart building in Rendezvous. This example points to a deeper problem in the face of greater investment into hotels. But that was hardly enlightening if you already understood the falling purchasing power of the average consumer. The real teachable moment lay in who was on the property at the time.

I counted five senior citizens lying in the open air, in the midday sun. All possessed suitcases of varying sizes and seemed to have been living there for some time. I know not from whence they came, or even whether they are Barbadian. However, seeing that many homeless senior citizens collectively resting in the open, especially at that time of the weekday, shaped a new image of economic Barbados in my mind. It is not a good one. It also raises uncomfortable questions for millennials who are struggling to build capital as the younger population declines.

With that out of the way, let us look at the critical points in the Central Bank of Barbados’ latest Review of the Barbados Economy for January to March 2026. The report presents a broadly reassuring story: real GDP is estimated to have grown by 1.7%, extending the expansion, with support from tourism, construction, agriculture and business services. Fiscal performance is framed as especially strong. For fiscal year 2025/26, the Government recorded a primary surplus of BDS$647.3 million, or 4.0% of GDP, while gross public sector debt fell to 94.6% of GDP. International reserves remained high at about BDS$3.0 billion, equal to 25.5 weeks of import cover, and inflation stayed low, with the 12-month moving average at 1.1%.

That narrative is credible in part, but the appendix tables make the picture less comfortable than the headlines suggest. First, growth has slowed from 2.6% in the comparable 2025 period to 1.7%, so the economy is still expanding, but with less momentum. Second, the tourism story is mixed: long-stay arrivals rose only 1.2%, hotel occupancy fell by 2.7 percentage points to 76.1%, yet RevPAR, or revenue per available room, rose by 12.4%. That implies improved earnings came more from higher prices and room rates than from strong volume growth.

The debt ratio improved, but government debt service absorbed 60.7% of revenue. That remains an unusually heavy burden, even if it is partly explained by prepayments and liability management. Meanwhile, the external accounts show resilience, but not strength: reserves declined modestly, foreign direct investment fell, and the financial account surplus weakened sharply. So the economy is growing while new investment into it is declining.