International credit rating agency, Fitch is giving  Barbados the thumbs up, assessing that its social stability should remain stable in 2024 and 2025.

Part of this assessment is based on recent trend, which reflects improving social stability, as economic conditions for households continue to improve. 

Fitch says consumer price inflation fell to 4.2% year-over-year in February (latest available data), down from 6.5% year-over-year. owing to stabilising food and energy prices. 

The rating agency forecasts that inflation will fall to an average of 3.9% in 2024 and 3.0% in 2025, which will provide some support to real household disposable incomes and consumer confidence. In addition, Barbados’ tourism sector will have another record year for arrivals in 2024, benefitting from employment and wages in the sector (which indirectly employs around 20% of the workforce).

Reflecting this trend, unemployment fell to 8.2% in the final quarter of 2023, the lowest level in four quarters. Against the backdrop of a gradual improvement in living standards, the already limited risks of strikes or protests in Barbados will decline in the months ahead. 

Given this backdrop, Barbados now holds a score of 26.1 (out of 100) in the Social Risk component of Fitch’s Political Risk Index (a high score implies high risk). This is a slight improvement from a score of 26.3 in the previous quarter and compares more favourably to Jamaica (35.8) and Trinidad and Tobago (32.43).