Press Release: Statement by an IMF Mission to Antigua and Barbuda
November 18, 2010Press Release No. 10/445
November 18, 2010
Mr. Chris Walker, head of an International Monetary Fund (IMF) staff mission to Antigua and Barbuda, issued the following statement today at the conclusion of the mission:
“An IMF team visited St. Johns during November 10–17 to undertake the second review of the program under the Stand-By Arrangement (SBA) approved by the Fund’s Executive Board on June 7, 2010. The mission held meetings with Prime Minister Baldwin Spencer, Minister of Finance Hon. Harold Lovell, senior officials of the Ministry of Finance, and representatives from labor unions and from the local business community. The mission would like to thank the authorities and technical staff for their excellent cooperation.
“The focus of the mission was to review ongoing macroeconomic and structural policies and also assess the performance of the program’s quantitative targets at end-September 2010. All end-September quantitative performance targets appear to have been met. Revenue growth has continued to be lower than expected at the time of the SBA approval, but programmed tax measures have begun to show some positive results in the form of increased collection rates. The authorities have continued to restrain expenditure growth in order to meet the program target for the overall fiscal balance. At the same time, the authorities have achieved notable success in restructuring debts to both domestic and external creditors. Through the agreement with the Paris Club, bilateral creditors have significantly extended the terms for repayment of existing debts.
“The authorities have continued to advance with structural reforms, which aim at strengthening revenue collection and public administration to improve budget performance, and at enhancing financial regulation and supervision to reduce macro-financial risks.
“The recapitalization of the Bank of Antigua has been completed, with the opening for business of the successor institution, the Eastern Caribbean Amalgamated Bank. Several new measures have been taken to increase filing and payment rates for the value-added tax. A strategy for the privatization of the State Insurance Corporation has been developed. The enactment of the new Procurement Act and the presentation to Parliament of legislation to create a single nonbank financial regulator have been delayed, but these are expected to be completed in coming months.
“The mission and the authorities have agreed on a draft letter of intent that describes measures being taken to enhance revenues, and outlines new structural benchmarks for 2011. These include the development and enactment of new audit legislation, the development of revised public service legislation, and the implementation of measures to enhance oversight of state-owned enterprises, among others. Based on these actions and on the fiscal performance, the mission notes that the positive momentum of the program has been maintained. The IMF Board is expected to discuss the second review toward the end of December.
“The authorities remain firmly committed to the program’s policies and objectives, which aim at correcting longstanding macroeconomic imbalances that have resulted in the accumulation of substantial arrears. Looking ahead, substantial risks still persist, including of low growth from global economic uncertainty, of external financial shocks, and of natural disasters. The fiscal situation continues to be constrained, and the public debt, although reduced from its level at the end of 2009, is still high. In the face of these challenges, the authorities’ continued strong commitment to the program is working to restore fiscal and debt sustainability, and to lay the groundwork for long-term stable economic growth.”