Governor Dr. Kevin Greenidge Discusses the State of Barbados' Economy with Business Leaders

Central Bank of Barbados Governor Dr. Kevin Greenidge recently delivered the featured address at BIBA: The Association for Global Business’ 2025 Economic Outlook Seminar.

The seminar brought together key industry leaders and professionals to analyse economic trends and gain insights into the year ahead. Governor Greenidge provided a data-driven perspective on both the national and global economic landscape, outlining key economic growth projections, inflation trends, financial sector developments, and strategic policy priorities that will shape Barbados’ trajectory in 2025.

BIBA President Marlon Yarde, in his remarks, acknowledged the resilience of Barbados’ international business sector but noted concerns over declining foreign currency permit renewals and the departure of some firms to other jurisdictions.

“Our sector continues to be an integral part of Barbados’ economy. However, it did not come without some loss, as Barbados witnessed the departure of some of our member firms to other jurisdictions,” Yarde stated. “The Governor also spoke to the drop in renewals of foreign currency permit holders in his presentation, and that is definitely a cause for concern for all of us.”

Despite these challenges, Mr. Yarde expressed optimism, citing opportunities for revitalization through the OECD’s global minimum corporate tax agreement and the need for sustainability-driven business strategies.

As Barbados continues to navigate a dynamic global environment, the Governor’s insights offered valuable guidance for businesses and investors seeking to make informed decisions. His address underscored the importance of maintaining economic stability while fostering growth and resilience in the face of evolving challenges.

One of the first questions posed to the Governor was about inflation and its impact on the cost of living. He explained:

“Inflation is slowing, but that doesn’t mean prices are coming down. It just means that prices are rising at a slower rate. Your purchasing power—what you can afford with your income—depends on how fast the economy is growing relative to inflation. If the economy expands faster than inflation, then on average, the cost of living becomes more manageable. However, this is not the case for everyone, as income distribution and individual circumstances vary.” 

He further elaborated that as the economy grows, people typically experience salary increases, which help offset rising costs. However, he cautioned that economic growth takes time to translate into widespread benefits: 

“It takes a few years of consistent growth for individuals to feel the effects in their pockets. Businesses must first see sustained improvements before they expand operations, hire more staff, or increase wages.” 

Another key topic of discussion was government borrowing, a subject that often sparks debate. The Governor addressed concerns by clarifying the role of borrowing in economic development: 

“Every country in the world borrows. Even the wealthiest individuals borrow—just look at some of the richest people globally. Many of them don’t spend their own money; instead, they leverage assets and borrow strategically. Borrowing itself isn’t bad. What matters is whether the debt is sustainable and if it’s being used productively.”

Discussing the economic outlook for 2025, the Governor emphasised that continued investment—both public and private—is essential for sustaining economic growth.

“Investment is what drives the economy. Whether it’s foreign direct investment, local business expansion, or government projects, it fuels economic activity. If we see stronger investment, we could achieve growth rates beyond the projected 3 percent.”

He explained that external factors, such as global economic conditions and trade policies, also influence Barbados’ growth prospects:

“If the global economy performs well, tourism will thrive, and visitor spending will increase. But if major economies slow down or impose trade restrictions, it could affect our economic momentum.”

On inflation, he noted that expectations for 2025 are relatively stable:

“We anticipate inflation to range between 1 percent and 2.5 percent, barring any external shocks such as increased global tariffs or supply chain disruptions. If such factors come into play, we could see some upward pressure on prices.”

The Governor wrapped up his address by reiterating the importance of long-term planning and strategic investment:

“Barbados is on the right path, but we must remain focused. Growth takes time, and while we have made progress, we must continue to invest in our future. The key is to be proactive, adaptable, and committed to building a resilient economy.”