Barbados

Barbados' new phase of engagement with the World Bank Group is guided by a 2025–2027 Country Engagement Note (CEN)—the first for the country in over 30 years. This renewed partnership follows Barbados’ return to borrowing from the International Bank for Reconstruction and Development (IBRD), after graduating in 1994.

Barbados, home to nearly 300,000 people, has faced a series of economic and environmental shocks in recent decades. While the country experienced steady growth for over a decade after graduation, the 2008–2009 Global Financial Crisis triggered a prolonged recession and a sharp increase in public debt—from 77% to 158% of GDP. These challenges were compounded by the COVID-19 pandemic, volcanic ashfall from St. Vincent, Hurricane Elsa in 2021, and Hurricane Beryl in June 2024, which caused major damage to fisheries and port infrastructure.

The World Bank Group is supporting Barbados’ efforts to implement a more resilient, inclusive, and sustainable development path.

Read More

Read Less

Barbados has recorded three consecutive years of robust economic growth following the pandemic, supported by a strong rebound in tourism. Real GDP grew by an estimated 3.8% in 2024, following 4.1% growth in 2023. Key contributors included tourism, business services, construction, and manufacturing, while agriculture contracted due to adverse weather.

Barbados has recorded three consecutive years of robust economic growth following the pandemic, supported by a strong rebound in tourism. Real GDP grew by an estimated 3.8% in 2024, following 4.1% growth in 2023. Key contributors included tourism, business services, construction, and manufacturing, while agriculture contracted due to adverse weather.

Long-stay tourist arrivals rose by 10.7%, supported by increased airline capacity and international events, while cruise passenger arrivals surged by 40.8%, with a 14.1% increase in cruise calls. Growth is projected to decelerate over the medium term, with GDP expected to expand by 2.8% in 2025, 2.0% in 2026, and 1.7% in 2027, as fiscal consolidation continues.

Despite the slowdown, the government continues to invest in renewable energy, sustainable tourism, and disaster preparedness—key areas for inclusive and sustainable growth.

Risks to the outlook include uncertainty in trade policy, potential global economic and financial shocks, extreme weather events, and escalating conflicts, all of which could affect investment, tourist arrivals, and inflation.

Read More

Read Less

The World Bank Group’s strategy for Barbados (2025–2027), outlined in its Country Engagement Note (CEN), aligns closely with the Government of Barbados’ Barbados Economic Recovery and Transformation (BERT) plan. BERT sets a comprehensive reform agenda anchored in six pillars: fiscal responsibility, debt restructuring, growth and investment, social protection, public sector reform, and climate resilience.

The CEN supports this vision by focusing on two strategic priorities:

Strengthening Climate Resilience

Disaster Mitigation - Hurricane Beryl Recovery Project:A $54 million emergency operation to restore affected sectors such as fisheries, enhance resilient infrastructure, and improve disaster response.

Contingent Line of Credit:A $30 million financial instrument to help Barbados manage disaster-related financial impacts and integrate risk management into key sectors like tourism and coastal zones.

Climate Resilient Debt Clause: Signed just before Hurricane Beryl impacted Barbados, this clause allows Barbados to pause debt payments for up to two years after a natural disaster, providing fiscal flexibility.

Renewable Energy: Support for Barbados’s goal of reaching 95% renewable energy by 2030 through private investment in solar, wind, battery storage, and sustainable finance tools such as green and blue bonds.

Water Sector Reform: A $40 million program under discussion to improve water governance, efficiency, and sustainability, supported by private sector investments and World Bank guarantees.

Improving Conditions for Growth

Boosting access to finance for micro, small, and medium enterprises as well as women entrepreneurs.

Enhancing digital payments and supporting trade finance.

Encouraging public-private partnerships that use climate risk tools to prioritize investments in resilient infrastructure.

Cross-Cutting Priorities

Gender equality is integrated across all projects, emphasizing women’s leadership and economic participation with tailored support in sectors like fisheries and gender-sensitive disaster recovery.

Barbados may benefit from regional programs addressing non-communicable diseases, skills development, and sustainable financing.

Read More

Read Less