- The IMF team reached a staff-level agreement with the Barbadian authorities on the completion of the fifth and final reviews of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements. The IMF’s Executive Board is expected to consider both reviews in June. Once the reviews are approved by the IMF Executive Board, Barbados will have access to about US$57 million in financing.
- Barbados’ economy continues to perform well. Growth has been robust, inflation has moderated, and the external position has strengthened. Nevertheless, risks to the outlook are tilted to the downside, given the highly uncertain external economic environment and Barbados’ vulnerability to natural disasters.
- Implementation of the home-grown Economic Recovery and Transformation (BERT 2022) plan remains strong. The authorities continue to focus on increasing resilience by maintaining fiscal discipline and debt sustainability and accelerating structural reforms to deliver more inclusive and sustainable growth.
BRIDGETOWN, Barbados – At the request of the government of Barbados, an International Monetary Fund (IMF) team led by Michael Perks visited Barbados between May 2-8 to discuss the implementation of Barbados’ Economic Recovery and Transformation (BERT 2022) plan, supported by the IMF under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements.
To summarize the mission’s findings, Perks made the following statement:
“Following productive discussions, the IMF team and the Barbadian authorities reached a staff-level agreement on the completion of the fifth and final reviews of the EFF and the RSF arrangements with Barbados. The agreement is subject to approval by the IMF executive board, which is expected to consider the reviews in June. The completion of the final reviews will mark the successful conclusion of the arrangements and will allow the authorities to draw the remaining SDR 14.175 million (about US$19 million) under the EFF arrangement and SDR 28.35 million (about US$38 million) under the RSF arrangement.
“The economy grew strongly in 2024 and continues to expand in 2025, driven by tourism, construction, and business services. Inflation has moderated further, due to an easing of global commodity prices and prices of domestic goods and services. The external position has improved, with a significant strengthening of the current account in 2024. International reserves have increased to almost US$1.7 billion (equivalent to over 7 months of import cover), ample to support the exchange rate peg. Real GDP is projected to grow by 2.7 percent in 2025, sustained by construction related to tourism projects and public investment. Nevertheless, the economic outlook is subject to significant downside risks, given heightened global uncertainty and Barbados’ vulnerability to external shocks and natural disasters.”
“Program performance remains strong. All quantitative performance criteria and indicative targets for the fifth review of the EFF were met. The fiscal primary surplus reached 4.3 percent of GDP in FY2024/25, with strong corporate tax revenues and prudent current spending controls enabling a significant increase in capital investment aimed at boosting infrastructure and resilience. For FY2025/26, the budget aims to reach a primary surplus of 4.4 percent of GDP, consistent with program projections. Public debt continues to decline, and the authorities remain firmly committed to reaching the 60 percent of GDP target by FY2035/36.
“The structural reform agenda is advancing, supported by technical assistance from the Fund and development partners. All three structural benchmarks (SBs) were met, including completing the assessment of human resource needs at the Barbados Customs and Excise Department, preparing a draft public-private partnership (PPP) framework and developing a daily liquidity forecasting framework by the Central Bank of Barbados (CBB). Efforts to strengthen growth and the business environment also continue to progress, including measures to address the skills gap.
“The authorities have completed both reform measures for the fifth RSF review. Key elements to strengthen the integration of climate concerns into public financial management have been delivered, including the development of public investment project appraisal guidelines, deepening of fiscal risk analysis, and preparation of a PPP framework. The CBB has also included physical climate risks in its bank stress testing exercise. In addition, the government has created a new Resilience and Regeneration Fund, repurposing the previous Catastrophe Fund with an expanded role and additional financing for disaster mitigation, response, and regeneration.
“The team would like to thank the authorities and other counterparts for their hospitality and the constructive and candid policy dialogue.”
IMF Communications Department
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