Barbados: IMF Executive Board Concludes the Third Reviews Under the Extended Fund Facility and the Resilience and Sustainability Facility
IMF News, June 28, 2024
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- Published: June 28, 2024
Executive summary and disbursements
- The Executive Board concluded the Third Reviews of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) with Barbados on a lapse-of-time basis.
- The conclusion of the reviews allows immediate disbursements of:
- SDR 14.175 million (about US$19 million) under the EFF.
- SDR 28.35 million (about US$37 million) under the RSF.
- Total disbursements to date:
- SDR 56.7 million (about US$75 million) under the EFF.
- SDR 85.05 million (about US$112 million) under the RSF.
Macroeconomic performance and outlook
- 2023 outcomes:
- GDP growth: 4.4 percent (driven by rebound in tourism and related sectors).
- Current account deficit: 9 percent of GDP.
- International reserves: US$1.5 billion at end-2023 (equivalent to over 7 months of imports).
- Inflation: moderated gradually with easing international commodity prices but remained somewhat elevated due to higher prices of certain domestic crops and stronger demand for tourism-related services.
- 2024 projections and expectations:
- GDP growth: expected to remain strong in 2024, driven by further growth in tourist arrivals.
- Inflation: projected to moderate to 3.1 percent by end-2024.
- Current account deficit: expected to narrow to 7.4 percent of GDP.
- Risks:
- Elevated vulnerability to potential global economic and financial shocks and natural disasters.
- These risks are partially mitigated by the authorities’ track record of implementation and strong commitment to reform.
Program performance and fiscal policy
- Program implementation:
- All quantitative performance criteria and indicative targets for the third review of the EFF were met.
- The authorities exceeded the primary surplus target for FY 2023/24.
- Primary surplus target for FY 2024/25: targeting 4 percent of GDP.
- Public debt and medium-term target:
- Public debt has fallen back to pre-pandemic levels.
- Authorities remain committed to bringing public debt down to 60 percent of GDP by FY 2035/36.
- Structural reforms and benchmarks met:
- Reforms to state-owned enterprises.
- Reforms to the public pension scheme.
- Reforms to the tax and customs exemption regimes.
- Reforms to public procurement processes.
- Reforms to public financial management.
Climate and resilience measures under the RSF
- Two RSF reform measures set for the third review were implemented, supporting the government’s climate-policy agenda.
- Specific measures:
- A new Stormwater Management Act to improve flood resilience was tabled in Parliament.
- An Energy Efficiency and Conservation Policy Framework for government agencies and public lighting was approved by Cabinet.
Press Release No. 24/254, IMF, June 28, 2024.