Press Release: Statement by the IMF Mission to Antigua and Barbuda
March 4, 2011Press Release No. 11/67
March 4, 2011
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 February 28 – March 4 to undertake the third 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 Minister of Finance Hon. Harold Lovell, Minister of Tourism Hon. John Maginley, senior officials of the Ministry of Finance, members of Parliament, 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 mission reviewed ongoing macroeconomic and structural policies and also assessed performance with respect to the program’s quantitative targets at end-December 2010. All end-December quantitative performance targets appear to have been met, despite continued weak revenue growth. Although enhanced administrative measures began to yield increased tax receipts toward the end of the year, government revenue continued to be lower than expected at the time of the SBA approval. The authorities have continued to restrain primary expenditure growth in order to meet the program target for the overall fiscal balance. At the same time, a significant reduction in interest payments was achieved through the restructuring of debts to both domestic and external creditors. Agreements with statutory bodies and with the Paris Club bilateral creditors have also considerably extended the terms for repayment of the existing public debt.
“Significant progress has been made on the structural reform agenda, which aims to strengthen revenue collection and Treasury management in order to improve budget performance, and to enhance financial regulation and supervision so as to reduce macro-financial risks. Several new measures have been implemented to enhance the efficiency of the Inland Revenue and Customs Departments. The operations of the Treasury Department have been improved with new voucher and cash management systems to help avoid the accumulation of budget arrears. The enactment of the new Procurement Act and the presentation to Parliament of legislation to consolidate the laws governing the regulation of the nonbank financial sector are still pending, but these are expected to be completed in coming months.
“The mission and the authorities have agreed on a draft letter of intent that incorporates the policies presented in the 2011 Budget to continue the Government’s fiscal consolidation program, and outlines new structural benchmarks for 2011. These include the development and enactment of new audit legislation, the development of revised public service legislation, the introduction of a more efficient customs classification system, and the implementation of measures to enhance oversight of state-owned enterprises, among others. Based on these actions and on fiscal performance, the mission would recommend to the IMF Executive Board completion of the third review under the Stand-by Arrangement. The IMF Board is expected to discuss the second and third reviews toward the end of March.
“The authorities remain firmly committed to the program’s policies and objectives, and recognize the benefits of strong macroeconomic policies in achieving the goals of their National Economic and Social Transformation (NEST) plan. The government is aware that there are still many challenges ahead, including the impact of the prolonged recession on employment, continued uncertainty in the global economic environment, rising food and fuel prices, and the risk of natural disasters. Despite the strong performance in 2010, the fiscal situation continues to be constrained. Revenue performance remains weak and further reductions in the public debt are needed. Under these circumstances it is important that the government continue to prioritize spending on the poorest and most vulnerable. The mission is confident that continued implementation of the program will help establish the conditions that will permit increases in growth and employment, and improvements in living standards.”