Press Release: IMF Executive Board Completes Eighth and Ninth Reviews Under Stand-by Arrangement for Antigua and Barbuda and Approves US$10.162 Million Disbursement
April 11, 2013Press Release No. 13/116
April 11, 2013
The Executive Board of the International Monetary Fund (IMF) has completed the eighth and ninth reviews of Antigua and Barbuda’s economic performance under a program supported by a 36-month Stand-by Arrangement (SBA). The completion of the reviews allows the immediate disbursement of an amount equivalent to SDR 6.75 million (about US$10.162 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 50.625 million (about US$76.2 million).
In completing the review the Executive Board approved the authorities' request for a waiver of nonobservance of the continuous performance criterion on external arrears. This waiver was granted on the basis of the temporary and minor nature of the deviations from the program objectives and the corrective measures undertaken by the authorities. The Executive Board also approved a request for a waiver of applicability for the end-March 2013 performance criteria (PC). This waiver was necessary because the Executive Board meeting was scheduled to take place prior to the availability of data to assess the relevant PCs.
Following the Executive Board’s discussion, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, made the following statement:
“Antigua and Barbuda’s economy is recovering gradually after three years of recession brought on by the international financial crisis. Tourism arrivals increased in 2012 and government programs provided an incentive for housing investment. However, significant risks to the macroeconomic outlook remain, including from a slowdown in advanced economies, higher import prices and natural disasters.
“The government continues to make progress in fiscal consolidation through expenditure restraint and improvements in revenue administration. All performance criteria for end-December 2012 were met, except for a minor breach of the continuous performance criterion on external arrears for which corrective action has been taken. The government maintains its successful efforts in debt restructuring to reduce the burden of debt service, although potential contingent liabilities in state-owned enterprises and the banking sector remain a concern.
“The authorities’ budget for 2013 is consistent with their goal of reducing the debt ratio to 60 percent of GDP by 2020. Continued implementation of structural reforms in revenue administration and public financial management will be essential to achieve the 2013 fiscal targets while providing space for productive public investment in human capital and infrastructure. Reducing concessions in customs and other tax expenditures will be an important part of this effort. The passage and implementation of best practice legislation in customs and tax administration will also ensure the sustainability of the fiscal consolidation effort going forward.
“The authorities expect to conclude the resolution of ABI Bank by end-April, 2013. This will reduce uncertainty in the domestic banking system and free resources to concentrate on other important financial sector reforms, including strengthening banking supervision, updating the regulatory and legal framework, restructuring the indigenous banking system and improving the Anti Money Laundering/Countering the Financing of Terrorism supervisory framework. Making the government’s asset management company operational will also be important to maximize recovery from the impaired assets of the ABIB resolution.”