IMF Executive Board Concludes 2023 Article IV Consultation with Antigua and Barbuda
IMF News, January 23, 2024
Source details
- Canonical URL
- IMF Executive Board Concludes 2023 Article IV Consultation with Antigua and Barbuda
Other formats
Bibliographic details
- Published: January 23, 2024
Economic outlook and activity
- Real activity is expected to return to pre-pandemic levels this year, with growth projected at 5.7 percent, driven by a rebound in tourism and construction activity.
- Growth is expected to moderate and gradually converge to its long-term trend.
- Downside risks to growth include weaker tourism performance, unfavorable financing conditions, natural disasters, slower-than-expected growth in trading partners, and a further strengthening of the U.S. dollar.
- Climate change risks noted: potential for droughts and hurricanes of higher severity and frequency.
Inflation and prices
- Inflation has declined from 2022 peaks but remains elevated at 6.6 percent in August this year, accompanied by moderating core inflation.
- Price pressures are expected to dissipate in 2024.
- Risk: inflation may persist longer than expected from higher global commodity prices.
Fiscal position and public debt
- Improved revenues, continued public sector payroll restraint, and a rise in nominal GDP brought down the primary deficit to 1.7 percent of GDP and the public debt to 87 percent of GDP in 2022.
- Gross financing needs remain high at 14 percent of GDP.
- Inability to access international capital markets continues to limit financing options.
- Outstanding arrears owed to external creditors and domestic suppliers persist; continued accumulation of arrears could deteriorate the fiscal position.
- Key fiscal indicators (percent of GDP unless otherwise noted):
- Primary balance: -1.7 (2022)
- Overall balance: -1.0 (2022)
- Total revenue and grants: 19.3 (2022)
- Total expenditure: 23.5 (2022)
- Gross financing needs: 14 percent of GDP (level noted in text)
Financial sector and stability
- The financial sector is well capitalized and liquid; the share of nonperforming loans is stable.
- Credit growth remains weak.
- Directors recommended:
- Enhancing oversight and regulation of credit unions.
- Incorporating climate risks into the stress testing framework.
- Continuing to strengthen the AML/CFT and Citizenship-by-Investment Program (CIP) frameworks.
Policy recommendations and structural measures
- Fiscal adjustment priorities:
- Focus on revenue mobilization and expenditure restraint.
- Limit discretionary tax exemptions.
- Broaden the Antigua and Barbuda Sales Tax (ABST) base.
- Support fiscal measures with a sound cash and debt management strategy focused on lengthening debt maturities and contingency planning.
- Close engagement with creditors and domestic suppliers and a concrete plan to resolve existing arrears and avoid new arrears.
- Social protection:
- Strengthen the social safety net to provide more targeted support for the vulnerable.
- Centralize programs to reduce coverage gaps and avoid duplication.
- Fiscal institutions and transparency:
- Enhance fiscal institutions to support the credibility of the fiscal framework.
- Address shortcomings in transparency and exchange of information frameworks for tax purposes to facilitate exit from the EU list of noncooperative jurisdictions for tax purposes.
- Growth and resilience:
- Continue efforts to boost tourism, including by increasing flight connectivity.
- Strengthen active labor market policies and expand opportunities for vocational training.
- Increase donor support for climate change-related projects and continue investments in education and training.
Executive Board assessment
- Directors welcomed the robust recovery, declining debt ratio, and declining inflation rate.
- They emphasized the need for decisive actions to address fiscal and external imbalances, improve growth prospects, and build resilience.
- They highlighted the importance of continued close collaboration with the Fund and other development partners.
- The next Article IV Consultation is expected to be held on the standard 12-month cycle.
Selected economic and financial indicators (annual percent change or levels as presented)
- Real GDP: 6.8 (2018); 4.3 (2019); -17.5 (2020); 6.6 (2021); 8.5 (2022); 5.7 (2023); 5.5 (2024); 4.2 (2025); 2.8 (2026); [2027 and 2028 columns not provided in the text block for Real GDP]
- Nominal GDP: 9.3 (2018); 4.4 (2019); -15.5 (2020); 10.2 (2021); 12.6 (2022); 11.0 (2023); 8.6 (2024); 6.7 (2025); 4.9 (2026)
- Consumer prices (end of period): 1.7 (2018); 0.7 (2019); 1.2 (2020); 9.2 (2021); 4.0 (2022); 2.5 (2023); 2.0 (2024)
- Consumer prices (period average): 1.4 (2018); 1.1 (2019); 1.6 (2020); 7.5 (2021); 5.0 (2022); 2.9 (2023); 2.4 (2024)
- Net foreign assets: 6.2 (2018); -0.9 (2019); -4.6 (2020); 18.2 (2021); 3.3 (2022); 4.1 (2023); 3.2 (2024); 2.2 (2025); 1.8 (2026)
- Net domestic assets: 0.1 (2018); -0.6 (2019); -4.4 (2020); 8.2 (2021); 3.5 (2022); 2.7 (2023); 3.1 (2024)
- Broad money (M2): 6.3 (2018); 0.8 (2019); -5.2 (2020); 13.9 (2021); 5.3 (2022); [2023 value not shown in the provided block]
- Credit to private sector: 1.3 (2018); 4.8 (2019); -4.1 (2020); -2.1 (2021)
- Central Government (percent of GDP):
- Primary balance: 0.0 (2018); -1.2 (2019); -3.7 (2020); -2.3 (2021); -1.7 (2022); -0.4 (2023); 0.9 (2024); 1.0 (2025)
- Overall balance: -2.5 (2018); -4.0 (2019); -6.2 (2020); -4.2 (2021); -1.0 (2022)
- Total revenue and grants: 19.8 (2018); 18.8 (2019); 19.7 (2020); 19.4 (2021); 19.3 (2022); 20.2 (2023); 20.6 (2024); 20.7 (2025); 20.8 (2026)
- Total expenditure: 22.3 (2018); 22.8 (2019); 25.9 (2020); 24.0 (2021); 23.5 (2022); 21.6 (2023); 21.8 (2024)
- External sector indicators:
- Current account balance: -14.6 (2018); -7.2 (2019); -16.3 (2020); -15.6 (2021); -16.2 (2022); -12.4 (2023); -11.7 (2024); -11.2 (2025); -10.6 (2026); -10.3 (2027); -10.1 (2028)
- Trade balance: -36.1 (2018); -34.4 (2019); -28.7 (2020); -30.6 (2021); -37.7 (2022); -34.2 (2023); -33.8 (2024); -33.1 (2025); -32.6 (2026); -32.5 (2027); -32.4 (2028)
- Nonfactor service balance: 30.2 (2018); 35.2 (2019); 23.3 (2020); 28.9 (2021); 29.0 (2022); 31.9 (2023); 32.2 (2024); 32.5 (2025); 32.7 (2026)
- Gross tourism receipts: 48.4 (2018); 53.9 (2019); 29.2 (2020); 34.5 (2021); 44.0 (2022); 46.3 (2023); 49.2 (2024); 49.3 (2025); 49.7 (2026); 50.2 (2027); 50.5 (2028)
- External public sector debt: 36.8 (2018); 39.0 (2019); 47.3 (2020); 46.7 (2021); 41.8 (2022); 42.8 (2023); 45.0 (2024); 47.0 (2025); 49.9 (2026); 51.8 (2027)
- Savings and investment (percent of GDP):
- Savings: 22.9 (2018); 27.4 (2019); 17.3 (2020); 26.8 (2021); 24.7 (2022); 25.2 (2023); 26.3 (2024); 26.4 (2025); 26.1 (2026); 25.8 (2027)
- Investment: 37.4 (2018); 34.6 (2019); 33.6 (2020); 42.4 (2021); 40.9 (2022); 37.6 (2023); 38.0 (2024); 37.5 (2025); 37.0 (2026); 36.5 (2027); 36.2 (2028)
- Memorandum items:
- Net imputed international reserves (US$ million): 329 (2018); 279 (2019); 222 (2020); 324 (2021); 346 (2022); 390 (2023); 462 (2024); 522 (2025); 566 (2026); 604 (2027); 640 (2028)
- Months of prospective imports: 4.5 (2018); 3.7 (2019)
- GDP at market prices (EC$ million): 4,333 (2018); 4,524 (2019); 3,824 (2020); 4,213 (2021); 4,746 (2022); 5,268 (2023); 5,720 (2024); 6,103 (2025); 6,403 (2026); 6,717 (2027); 7,047 (2028)
- Public debt stock (EC$ million) 1/, 2/: 3,783 (2018); 3,803 (2019); 3,829 (2020); 4,021 (2021); 4,134 (2022); 4,255 (2023); 4,388 (2024); 4,511 (2025); 4,623 (2026); 4,738 (2027); 4,865 (2028)
- Public debt stock (percent of GDP): 87.3 (2018); 84.1 (2019); 100.1 (2020); 95.4 (2021); 87.1 (2022); 80.8 (2023); 76.7 (2024); 73.9 (2025); 72.2 (2026); 70.5 (2027); 69.0 (2028)
Press Release No. 24/22, January 23, 2024, IMF Executive Board Concluding Statement on the 2023 Article IV Consultation with Antigua and Barbuda.