One of Barbados’ leading economists sees some challenges around the corner for the country if the trend of rising international interest rates persists.
Winston Moore, professor of economics and deputy principal at the University of the West Indies, Cave Hill Campus, said while the country’s $3.1 billion in foreign reserves at the end of June “gives us room to absorb a shock”, Barbados could potentially face a foreign exchange squeeze.
He was speaking of an outcome where “higher oil prices raise the import bill, while slower growth abroad could weaken tourism receipts, so foreign exchange is squeezed from both directions: more going out, less coming in”.
Moore also said that a scenario of rising interest rates, which would raise the cost of borrowing for Barbados and impact debt repayments, “therefore strengthens the case for the tools Barbados has championed”.
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