Antilles Economics conducted a survey of Barbadian consumer’s perceptions of economic conditions in May 2018, around the time of the general election[1]. Respondents were pessimistic about their households’ current conditions, with 45% saying that their household’s situation was worse today than one year ago. Persons between 56 and 70 years old were particularly negative: 75% believed that their current situation was worse than one year ago. When considering differences by income, across all income categories at least one in four persons were negative about their current situation.
Figure 1: Perceptions of Current Economic Conditions by Age and Income, compared with 12 months ago, % of Respondents1
1 Respondents who answered “the same” are not shown.
The main reasons for the pessimism about their current situation appear to be higher expenses and lower levels of savings, as income levels remained the same. Respondents expected their income and savings to improve within the next 12 months – although 46% also believed their expenses would be higher – which supports their belief that in the next 12 months their household’s situation would improve. As a result, 44% of respondents believed that their household’s situation would be better within the next 12 months.
Figure 2: Perceptions of Household Income, Expenses and Savings, % of Respondents1
1 Respondents who answered “the same” are not shown.
The younger generations were the most positive, with 50% of persons between 21 and 55 years of age believing that their situation would improve compared to just 12% of their older peers. The results by income suggested that as income increased, confidence in the future declined.
Figure 3: Perceptions of Future Economic Conditions by Age and Income, compared with the next 12 months, % of Respondents1
1 Respondents who answered “the same” are not shown.
When considering business and economic conditions Barbadians were very pessimistic about current conditions (see Figure 4) but more optimistic about the future (see Figure 5). Respondents were most likely to take a holiday (either in Barbados or abroad), remodel their home and buy appliances, with 70%, 37% and 30%, respectively, saying that they intend to do these activities within the next 12 months.
Figure 4: Perceptions of Current Business and Economic Conditions by Age and Income, compared with 12 months ago, % of Respondents1
1 Respondents who answered “the same” are not shown.
Figure 5: Perceptions of Future Business and Economic Conditions by Age and Income, compared with the next 12 months, % of Respondents1
1 Respondents who answered “the same” are not shown.
Since this survey was conducted, Barbados negotiated a four-year Extended Arrangement under the Extended Fund Facility of the International Monetary Fund intended to correct the country’s balance of payments and fiscal challenges (see AE Quarterly June 2018 for more on our short-term economic outlook). As part of its recovery programme, the Government of Barbados defaulted on its debt, implemented a debt exchange and introduced new taxes. The results have been a significant strain on consumers, who, from the May 2018 survey, were expecting business and economic conditions to improve. The disconnect between their expectations and the eventual reality could be linked to the optimism that accompanied the general elections that took place in May 2018. Voters might have expected the change in administration to lead to improvements in economic and business conditions in the short term. The next edition of this survey takes place in October 2018 and will reveal the impact of the economic recovery programme on consumer confidence.
[1] This survey was conducted in person with consumers during May 2018, and collected responses from a final sample size of 300 persons. To adjust for differences in response rates, the responses were weighted by the contribution of each gender and age group to the total working age population.
