IMF Staff Concludes Visit to Antigua and Barbuda

IMF News, June 23, 2023

Source details

Visit dates: June 19–23, 2023.
Mission led by: Ms. Emine Boz.
Press Release No.: 23/237.
Statement at conclusion issued by: Ms. Emine Boz.
Note: End-of-Mission press releases convey preliminary findings; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

Growth projections: 7.8 and 5.5 percent for 2022 and 2023, respectively.
Tourism: Number of stayover tourists reached 98 percent of pre-pandemic levels during the first four months of 2023, led by arrivals from the U.S. and U.K.
Real GDP: Expected to recover to its pre-pandemic level in 2023.
Inflation: Peaked at 9.2 percent at end-2022; receded to 4.6 percent (year-on-year) by March 2023, partly driven by a decline in fuel prices.

Primary balance: Preliminary budget outturn suggests a primary deficit of 1.4 percent of GDP for 2022.
Fiscal context: The 2022 deficit was smaller than that in 2021, but higher than projected by the authorities and IMF staff in the 2022 Article IV Staff Report.
Public debt: Public debt-to-GDP is estimated to have declined to 87 percent by end-2022 from 97 percent at end-2021 on the back of strong nominal GDP growth.
Key fiscal recommendations:
- Continue efforts to streamline tax exemptions.
- Strengthen tax compliance and administration.
- Improve public spending efficiency.
- Enhance coordination across social transfer programs and digitize information, accompanied by efforts to broaden coverage and improve targeting and monitoring of the social safety net.
- Work with domestic and external creditors to clear existing arrears and avoid accumulation of new arrears.
Policy window: Strong economic recovery combined with global food and fuel prices down from their highs last year provides a window of opportunity to put public finances on a sustainable footing while protecting the vulnerable.

Stability and liquidity: Financial sector is stable and liquid, with non-performing loans declining gradually.
Credit: Bank credit to the private sector remains subdued relative to the growth in economic activity.
Non-performing loans: Nonperforming loan ratios of commercial banks and credit unions modestly exceed the prudential level of 5 percent.
Loan loss provisioning: Authorities should maintain strong loan loss provisioning, which is currently above the ECCB’s prudential level of 60 percent for both banks and credit unions.
Regulatory recommendations:
- Monitor credit growth of credit unions.
- Further strengthen supervision and regulation of the credit union sector.

Natural disasters: Country faces increasing challenges from natural disasters; authorities should continue resilience building efforts and create sufficient buffers against natural disasters.
Energy transition: Transition to renewable energy is essential for reducing reliance on fossil fuels and lowering energy costs and should be accelerated.
Labor market and skills: Labor market recovery may not raise incomes of all, especially vulnerable workers; efforts to upskill workers are critical for further reducing unemployment and facilitating mobility across sectors.

Data gaps to address:
- Calculation of the rental component of the consumer price index.
- Improvements in the compilation of national accounts data.
Rationale: Improvements are essential to facilitate evidence-based policy making.

The mission team thanks the authorities and other counterparts for their collaboration, support, and valuable discussions.

Source: IMF press release, June 23, 2023.