Barbados’ Social Stability To Remain Robust In 2024 And 2025

• The political backdrop in Barbados is expected to remain relatively favourable in 2024 and 2025 due to strong government and social stability according to Fitch Solutions. Part of this trend will reflect improving social stability as economic conditions for households continue to improve.
• Consumer price inflation fell to 4.2% year-over-year (YoY) in February (latest available data), down from 6.5% YoY in the year-earlier period, owing to stabilising food and energy prices. Fitch forecasts that inflation will fall to an average of 3.9% in 2024 and 3.0% in 2025, which will provide some support to real household disposable incomes and consumer confidence.
• Furthermore, Barbados’ tourism sector will have another record year for arrivals in 2024, benefitting employment and wages in the sector (which indirectly employs around 20% of the workforce). Reflecting this trend, unemployment fell to 8.2% in the final quarter of 2023, the lowest level in four quarters.
• Against the backdrop of a gradual improvement in living standards, the already limited risks of strikes or protests in Barbados will decline in the months ahead. Of note, protests in Barbados are relatively rare and, when they happen, are normally peaceful.
• Given this backdrop, Barbados now holds a score of 26.1 (out of 100) in the Social Risk component of Fitch’s Political Risk Index (a high score implies high risk). This is a slight improvement from a score of 26.3 in the previous quarter and compares more favourable to Jamaica (35.8) and Trinidad and Tobago (32.43).

 (Source: Fitch Solutions)