Inflation Set To Ease In Barbados In 2024 And 2025

• Consumer price inflation (CPI) in Barbados will fall to an estimated average of 3.9% in 2024 and 3.0% in 2025, owing mainly to stabilising commodity prices says Fitch Solutions. This forecast is down significantly from average price growth of 5.0% in both 2022 and 2023.
• Slowing inflation will provide support to real household incomes, private consumption, and wider economic growth in Barbados. Real GDP growth is forecasted to grow by 3.1% in 2024 and 2.1% in 2025.
• That said, despite accelerating consumer spending due to the impacts of a robust tourism sector and recovering real incomes, core inflation will be kept in check by government fiscal austerity efforts, which are in line with International Monetary Fund (IMF) loan conditions.
• However, risks to price growth are tilted to the upside, with the potential for any commodity-price driven shock to push up inflation and slow Barbados’ economic recovery. As an island economy, Barbados imports 95% of its energy (mainly hydrocarbons) and around 85% of its food from abroad and is therefore highly exposed to the global rise in commodity prices.

(Source: Fitch Solutions)