Delayed Rebound Of Tourism Industry To Undermine Barbadian Recovery

• Weak tourism activity in H221 and a nationwide public health lockdown in February and March will drag down headline real GDP growth in Barbados in 2021. 
• Against this background, Fitch Solutions has revised its 2021 real GDP growth forecast to 1.8%, from 3.1% previously, given the expectations for underperformance in H221 activity. 
• The agency expects economic activity will remain sluggish into Q321.Tourism activity is highly seasonal, with Q1 and Q4 seeing the bulk of arrivals. Given that vaccines were not widely available until Q2 in key tourism source markets such as the US and UK, Fitch expects the 2021 headline growth figure to reflect the slow return of tourism activity. 
• Moreover, a spike in COVID-19 cases in July has prompted the government to re-impose overnight curfews starting July 13, which will limit commercial activity and weigh on employment.
• However, an eventual rebound of tourism and base effects is expected which will boost the 2022 headline growth figure. Considering this, the agency has revised its 2022 real GDP growth forecast upwards to 4.0%, from 3.5% previously.

(Source: Fitch Solutions)