Macroeconomic Forecast Barbados

BMI View: Inflation came in at 11.2% y-o-y in October 2011, rising for the seventh consecutive month. The country is highly susceptible to imported inflationary pressures, and inflation was driven in part by historically high oil prices in 2011 (oil imports account for about 25% of total imports). However, given that our Commodities team forecasts a slight moderation in commodities prices in 2012, we believe supply side inflationary pressures and headline inflation should cool somewhat this year, informing our 8.0% year-end inflation forecast.

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