Barbados is slowly recovering from the severe impact that the global financial crisis had on the country's narrow and open economy. After contracting in 2008 and 2009, the real economy rebounded slightly (by 0.3%) in 2010. We believe that the economy has bottomed out and that economic activity is now accelerating. Real GDP increased by 2.8% in the first three months of 2011. A pickup in tourism (arrivals and spending each grew by 7% in the first quarter of 2011) as well as a gradual rebound in other private-sector activity should support the forecasted real GDP growth of 2% this year and 3% in 2012-2013. Barbados's fiscal position, which is a significant weakness of its credit profile, improved in 2010.
