Halt In Tourism Activity Will Widen Current Account Deficit In Barbados

  • The sharp contraction in tourism activity due to the Covid-19 pandemic will reduce Barbados’ large service trade surplus and lead to a substantial widening of its current account deficit.
  • Sizeable international reserves and support from multilateral lenders will reduce risks to Barbados’ overall external account stability.
  • Fitch Solutions revised down its 2020 and 2021 current account deficit forecasts to 6.3% of GDP and 4.7%, respectively, from 4.0% and 4.1% as it expects the decline in service exports will outweigh the slowdown in goods imports.

(Source: Fitch Solutions)