Halt In Tourism Activity Will Widen Current Account Deficit In Barbados

• Barbados’ current account deficit will widen significantly to 6.3% of GDP in 2020, from 2.2% in 2019, due to a collapse in service sector exports.
• Fitch Solutions expects that a halt in tourism activity from March to July, amid the global spread of Covid-19, will severely undermine Barbados’ large service trade surplus and substantially increasing its current account deficit.
• A sizeable fall in goods exports will also lead to a widening of Barbados’ goods trade deficit, compounding the narrowing of the services trade surplus.
• Moreover, the agency expects the continued spread of Covid-19 and weak rebounds in key source tourism markets will keep Barbados’ current account deficit sizeable in 2021 at 4.7% of GDP.

(Source: Fitch Solutions)