The IMF Has Completed its November Visit to Barbados

The International Monetary Fund (IMF) has completed its 2023 Article IV consultation and second review of Barbados’ Extended Fund Facility (EFF) and Resilience and Sustainability Fund (RSF) arrangements.

Following the November 6-13 virtual visit, which was led by Pablo Morra, the team released a statement in which it said that “Barbados has weathered the COVID-19 pandemic and other recent shocks well and has preserved macroeconomic stability.” It pointed to the 10 consecutive quarters of economic growth the island has experienced and the rebound in its main sector, tourism, to illustrate this.

The statement also revealed that 

“The authorities met the primary fiscal target set for the first half of FY2023/24 and are on track to raise the primary surplus to about 3½ percent of GDP by the end of the fiscal year. The public debt ratio has fallen to pre-pandemic levels and is projected to continue declining, while sovereign credit ratings are gradually improving.”

The statement highlighted that the “steady implementation of structural reforms is essential to support fiscal sustainability and create fiscal space for public investment,” citing “the policy and legislative framework for pension reform” and the advancement on state-owned enterprise (SOE) reforms as areas of progress.

It went on to add that “to increase medium-term growth, it is important to further enhance the ease of doing business, boost economic efficiency, and stimulate private investment, including by improving trade and business facilitation, investing in skills and education, and promoting digital technologies.”

Barbados and IMF Reach a Staff-Level Agreement

The statement confirmed that “all quantitative program targets and structural benchmarks set for the second review under the EFF have been met. In addition, all reform measures set for the second review under the RSF have been implemented.”

As a result, subject to approval from the IMF’s Executive Board, Barbados will receive a further disbursement of approximately US $19 million under the EFF programme and approximately US $56 million under the RSF programme.

The Executive Council will meet to confirm the staff level agreement in December.

Read the full statement here.