15 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2022 Economic Outlook 2022-2023 Fiscal According to Trading Economics, global macro models and analysts expect Barbados’ GDP to reach $5.45 USD Billion by the end of 2022. Additionally, Barbados’ GDP is projected to trend around $5.72 USD Billion in 2023. The Central Bank of Barbados, in its July 2022 press release, indicated that “the domestic macro environment will continue to be affected by the global instability”. It added that surges in global prices have intensified growth challenges associated with the Covid-19 pandemic. It however noted that the strength of Barbados’ recovery remains dependent on the sustained revival of the tourist sector together with the accelerated implementation of investment projects. Noting that forward tourism bookings for the remainder of the fiscal were encouraging as travelers rescheduled previously postponed trips, the Central Bank’s release cited that the reopening of the Wyndham Sam Lords property is expected to be a boost to the tourism product. Global pricing pressures, the impact of monetary policy changes on advanced economies together with summer travel bottlenecks were however cited as events that could dampen travel demand. Given rising construction costs and new investment products coming on stream at a slower than anticipated pace, the CBB has lowered its growth forecast for the Barbados economy to a revised range of 9 to 10 percent. It noted this is likely to be higher if the rebound in tourism products is stronger than currently forecasted. Economic Recovery Rising costs may have a significant impact on firms and current disruption in the supply chain may also delay the construction of projects if costs keep rising. It is projected that interest cost on existing international debt will rise due to increasing rates, and as those international rates rise so too will Barbados’ interest cost which is anticipated to rise by 0.2 percent. The government, faced with the challenge of responding to spikes in inflation, has recently introduced a suite of measures to assist in reducing the cost of living. These include widening the basket of tax-exempt goods and reducing the cost of electricity and petroleum products like gasoline and diesel. Additionally, there is a private sector initiative to lower markups on selected consumer goods which are staples consumed by the poor and vulnerable. While the rise in import prices will negatively impact short-term reserves, the reserve buffer remains adequate to maintain the stability of the exchange rates. Additionally, as commodity and tourism prices return to a semblance of normalcy, medium-term reserves should remain adequate. The Way Forward From a macro-economic perspective, all indications are that we will continue to see continued economic growth and expansion, improved labour market conditions, an enhanced business climate and general optimism about the way forward. With such positive prospects ahead, it is imperative that we are well positioned and prepared to take advantage of opportunities that will arise. The Covid-19 pandemic, as unexpected and derailing as it was, also brought positive benefits and lessons which will stay with us as we continue to build out and transform to do just that. Our takeaways from a Covid environment included a critical assessment of how and what we needed to improve to remain relevant in this changed environment where member expectations around quality of service, member satisfaction and overall total experience have transitioned significantly away from what was acceptable in a pre-Covid environment. There is now a greater call for immediacy in delivery of service coupled with enhanced demands for demonstrations of greater operational efficiency and being more in tune with the voice of the member; demonstrated by a deeper understanding of needs and expectations. We acknowledge the transitions that have to be done to not only remain relevant in the sector, but also to remain your financial services provider of choice and are currently undergoing key changes as part of our commitment to deliver on both of those. We accept the need to embrace the adoption and use of efficient and effective technologies and digital platforms to deliver services to you in the manner that suits you best. We also acknowledge that this has to be coupled with greater intimacy delivered by passionate, enthused and committed staff. It is with these objectives in mind that we will continue to focus on completing our corporate redesign initiative to ensure our human resources and corporate structures are fit for the future, and aligned to deliver on your expectations. Similarly, we will continue to review our existing technology infrastructure and future technology investments to ensure we have the necessary systems, tools, products and services to deliver in the way that guarantees your expectations can be exceeded. The way forward will be a journey of change and continuous improvement, and it will require a partnered approach. Your continued support and your constructive feedback will be necessary as we work through the various transformation initiatives to not only remain the acknowledged best of class, but also to truly demonstrate that this is where you belong.
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