A difficult economic environment continues to strain Barbados' fiscal accounts and has taken a serious toll on this small and open country, which relies on tourism and foreign investment. Barbados' real GDP contracted by 4.8% in 2009 (in line with our previous estimates), and will likely stay flat this year. Barbados' performance varies by sector. On one hand, Standard&Poor's Ratings Services expects tourism to grow by 4% in 2010 (supported by 1.4% growth in the first quarter of this year), consequently boosting the nation's retail and construction sectors. The expected construction-sector gains also reflect the government's ongoing capital-spending program (although this program has been scaled down because of fiscal constraints) and the anticipated startup of a few foreign
