Press Release No. 10/92

Press Release: IMF Mission and Antigua and Barbuda Reach Agreement in Principle on US$125 Million Loan

March 16, 2010

Mr. Wendell Samuel, chief of the International Monetary Fund (IMF) mission to Antigua and Barbuda, issued the following statement today in St. John’s:

“The Antiguan authorities and an IMF staff mission have reached agreement on a program that the mission will recommend the IMF support through a Stand-By Arrangement (SBA) for SDR 81 million (about US $124 million) over 36 months. Following review by staff in Washington and management approval, the IMF’s Executive Board would consider Antigua and Barbuda’s request for an SBA, which is envisaged for May.

“Antigua and Barbuda is addressing the most severe economic crisis in the country’s history. The global economic crisis has compounded longstanding fiscal imbalances and drastically reduced tourism, foreign direct investment and remittances. The program’s main goal is to restore fiscal sustainability and put Antigua and Barbuda back on path of sustainable growth. The authorities’ program is expected to benefit from, in addition to IMF financing, significant additional financing from other international institutions.

“The fiscal position will be strengthened under the program through a range of policy measures, including more efficient tax collection, a reduction in the interest bill on both domestic and external debt, and actions to streamline government expenditure and raise revenue, while protecting targeted social spending. The fiscal program and debt-management strategy are geared to both eliminate debt arrears and reduce the debt-to-GDP ratio over the coming years.

“This fiscal strategy will be supported by reforms to: (i) strengthen public financial management; (ii) improve the collection of revenues at the Customs and Inland Revenue Department; and (iii) ensure the long term sustainability of the pension system.

“A key consideration in the design of the program has been to maintain social safety net spending, to protect the most vulnerable, in particular the school meals program and allowances for the elderly. In addition, the government’s plan will introduce unemployment benefits and many basic commodities will continue to be exempted from the Antigua and Barbuda Sales Tax (ABST).

“Additional reforms will strengthen the financial sector, including legislation to transform the Financial Sector Regulatory Commission into a single regulatory unit for offshore banks and nonbanks.”

Antigua and Barbuda, which became a member of the IMF on February 25, 1982, has a current IMF quota of SDR 13.5 million (about US$20.6 million).

For additional information on Antigua and Barbuda and the IMF see: http://www.imf.org/external/country/ATG/index.htm