IMF Staff Concludes Visit to Antigua and Barbuda

IMF News, June 21, 2024

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IMF team led by Mr. David Moore visited Antigua and Barbuda during June 17–21, 2024, meeting government officials and other stakeholders to discuss recent economic developments, the economic outlook, and policy priorities.
End-of-Mission note: The 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.

Real GDP growth is estimated at 4.2 percent in 2023, returning the country to pre-pandemic real output levels driven by strong construction activity and continued growth in tourist arrivals.
Growth in 2024 is projected to accelerate to 5.8 percent, temporarily higher due to Antigua hosting the UN’s Small Island Developing States Conference and co-hosting of the T20 Cricket World Cup.
Inflation rose to 6.0 percent in April 2024, from 3.3 percent at end-2023.

Public debt to GDP ratio declined from its pandemic high, from around 100 percent in 2020 to an estimated 76 percent in 2023, reflecting the economic recovery and an upward revision to nominal GDP from a rebasing of the national accounts statistics.
Cash constraints continue to bind, and domestic and external arrears are substantial.
Policy priorities and recommendations:
- Fiscal adjustment is needed to create space to clear arrears and prevent their reemergence.
- Timely completion of the authorities’ validation of domestic arrears is essential.
- Develop a comprehensive arrears clearance strategy and engage closely with creditors and domestic suppliers to restore debt sustainability.

The 2024 budget includes a package of revenue measures expected to improve the fiscal position by around ½ percent of GDP in 2024:
- Increasing the standard ABST rate and broadening its base.
- Introducing excise taxes on alcohol, tobacco, and cannabis products.
- Raising property taxes for high-end properties.
Additional measures to strengthen the fiscal position:
- Closer adherence to the cap on discretionary tax exemptions.
- Continue recent efforts to enhance expenditure commitment controls.

Bank credit to the private sector rebounded by 7 percent in 2023, after contracting in the previous two years.
Credit unions have expanded rapidly over several years, with loan growth moderating to around 8 percent in the year through 2024Q1.
Non-performing loans for both banks and credit unions, as a share of total loans, are modestly above the prudential level of 5 percent.
Recommendation: Stronger oversight and regulation of credit unions, including through risk-based capital requirements, would promote a level playing field across the financial sector and support asset quality.

Persistent data gaps remain despite efforts to update the national accounts and improve data quality.
Suggested priorities to facilitate evidence-based policy making and transparency:
- Ensure sufficient resources for completing the Population and Housing Census.
- Ensure sufficient resources for producing the Producer Price Index and the 2023 Labour Force Survey.
- Improve reporting on the financial operations of state-owned enterprises.

The IMF team thanked the authorities and other counterparts for their collaboration, support, and the valuable discussions.

Source: IMF Staff Concluding Statement, June 21, 2024.