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The International Monetary Fund says that the Barbados economy remains severely depressed by the ongoing global coronavirus pandemic. At the conclusion of a virtual staff visit led by Mission Chief, Bert van Selm, the IMF stated that while tourism is expected to recover gradually in the second half of 2021 and the first half of 2022, risks to the outlook remain.
“Tourism activity has picked up in recent months but remains at a fraction of normal levels. The economy is estimated to have grown 5½ percent in the second quarter of 2021 (relative to Q2 2020). A category 1 hurricane (Elsa) struck Barbados in July and caused significant damage to the island’s housing. Economic growth for the second half of 2021 and the first half of 2022 is premised on a gradual tourism recovery.”
The IMF team stated further that despite the challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme, while expanding critical investments in social protection. “Indicative targets for end-June under the EFF were met. The global SDR allocation that became effective on August 23, 2021 (including an allocation of about US$129 million to Barbados) has further boosted international reserves to more than US$1.4 billion”, the Fund’s release stated.
The team reported also that structural reforms are ongoing, and structural benchmarks under the EFF were met.
“The government developed plans to recapitalise the Central Bank of Barbados and address medium and long-term challenges for the National Insurance Scheme (NIS) stemming from the debt restructuring and the COVID pandemic, and recapitalisation of the NIS has started. A medium-term fiscal framework was tabled in parliament to enhance transparency and accountability in fiscal policy, while retaining sufficient flexibility to respond to the pandemic and other economic shocks.”
The staff visit to discuss the implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF) took place between August 24 and 27. The IMF team will conduct the sixth review under the EFF in November.
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