The year 2022 has been one of transition at both the national and organisational levels. Nationally, we welcomed the lifting of COVID-necessitated restrictions on travel, entertainment, and socialising, which underpinned the return to relative normalcy from a social and economic perspective. As a result, the Barbados economy recorded significant growth of approximately 10 percent, primarily on the strength of a rebound in the tourism sector. The impetus provided by the upturn in tourism activity boosted other key economic sectors, thereby contributing to a reduction in unemployment and a corresponding decrease in jobless claims.
The protracted Russia-Ukraine conflict and ongoing global supply chain disruptions stoked inflationary pressures in international food and energy markets, causing significantly higher payments for imports and a spike in domestic retail price inflation.
The stock of gross international reserves was lower than the comparable figure at the end of the previous year. This was due to the combined effects of reduced public sector inflows from multilateral institutions and higher imports outweighing the improved foreign exchange earnings from the productive sectors.
Further support to Barbados’ economic recovery was secured with the Government of Barbados entering into a second Enhanced Fund Facility (EFF) programme and a pioneering arrangement under the Resilience and Sustainability Facility (RSF) with the International Monetary Fund (IMF). These programmes are expected to provide both the support and structure required to maintain the positive momentum generated by the previous Barbados Economic Recovery and Transformation (2018-2022) programme.
The financial system remained stable in 2022, with financial institutions continuing to be well-capitalised and recording high levels of liquidity. Non-performing loans at commercial banks and deposit-taking finance and trust companies decreased, while credit to both the non-financial private sector and households grew.
In 2022, the Bank celebrated its 50th anniversary under the theme “Living the Legacy: Continuing the Journey.” A milestone such as this is naturally a time of reflection, not only on our accomplishments, but also, and perhaps more critically, on who we are as an institution.
As an organisation established in the early post-Independence years, we have always viewed ourselves as a nation-building institution. Supporting the arts, culture, and education, while not part of our official mandate, is embedded in our identity.
Our anniversary celebrations reflected this philosophy. The long-running Annual Review Seminar featured a special keynote session that presented research on emerging central banking issues, and a special 50th anniversary edition of the Caribbean Economic Forum focused on the role central banks play in tackling inflation.
To complement these activities, we hosted a free public concert that showcased local artistes and sponsored a schools’ essay competition, giving students in two age groups the opportunity to develop their research and writing skills while learning more about the Bank.
People are at the heart of our organisation. Therefore, a highlight of the golden jubilee celebrations was an awards ceremony during which we paid tribute to many of our long-serving employees, including several who have been with the Bank for more than 40 years.
Even in the midst of our celebrations, we pressed ahead with many initiatives, both existing and new.
At the start of the year, we began to educate Barbadians about the Fair Credit Reporting Act while working on the guidelines and licencing structure that will underpin our oversight of this activity.
Work continued on expanding the automated clearing house (ACH) to allow more entities access. When completed in the first quarter of 2023, it will facilitate an increase in real-time payments, thereby enhancing business activity in the country.
In September, we issued BOSS+ bonds, a four-year Government security, to test the appetite for investment within the domestic capital market and to raise financing for social, economic, and environmental initiatives.
Finally, in December, we launched a new series of banknotes, our first printed on a polymer substrate. With this change, the notes are harder to counterfeit and are expected to have a significantly longer lifespan. We, therefore, anticipate cost savings to the Bank in the medium term.
In 2023, we will continue to contribute to restoring the country’s economic health, maintaining financial stability, and assisting with the implementation of the BERT (2022-2025) programme.
On the regulatory front, we plan to fully implement the regime for licencing and supervising domestic payment providers and credit bureaus, while also ensuring that we continue to enhance and strengthen our regulations related to issues such as anti-money laundering (AML) and climate-related risks.
We expect to complete the upgrade of the ACH to modernise the payments system. With this upgrade, some non-bank financial institutions will join, leading to greater financial inclusion.
We will also embark on a digital financial literacy campaign to help Barbadians understand key issues, with our initial focus being on the themes of inflation and investing.
Internally, we will continue to build out a new IT strategy to underpin our digital transformation, which will allow us to become more efficient, serve our various publics more effectively, and contribute to modernising the country’s payments systems while simultaneously strengthening our cybersecurity posture.
I must end my message by, on behalf of the entire management and staff, paying tribute to former Governor Cleviston Haynes, who demitted office on January 31, 2023. Mr. Haynes was a faithful and dedicated employee of the Bank during his more than 42 years at the organisation. His knowledge of economic and regulatory matters was both broad and deep, which allowed him to lead with a steady hand during his six-year tenure as Governor. His legacy, like those of our other previous Governors, is one of which we can be proud and on which we can build as the Central Bank of Barbados continues its journey into the next 50 years.