Washington, DC:
At the request of the Government of Barbados, an International Monetary
Fund (IMF) team led by Bert van Selm conducted a staff visit via
videoconferencing from February 7-11, 2022. During the visit, the team
discussed the implementation of Barbados’ Economic Recovery and
Transformation (BERT) plan, supported by the IMF under the Extended Fund
Facility (EFF). To summarize the mission’s findings, Mr. van Selm made the
following statement:
“The ongoing COVID-19 pandemic continues to pose economic challenges to
Barbados. Tourism has rebounded in recent months, leading to real GDP
growth of 1.4 percent for 2021, and 11½ percent in Q4 2021 (over the same
quarter in 2020). A gradual economic recovery is expected over the medium
term, but risks to the outlook remain high.
“In this very challenging environment, Barbados continues to make good
progress in implementing its ambitious and comprehensive economic reform
program, while expanding critical investments in social protection. All
indicative targets for end-December under the EFF were met. International
reserves, which reached a low of US$220 million at end-May 2018, increased
to US$1.5 billion at the end of 2021. Barbados recorded a small (½ percent
of GDP) primary surplus over the first three quarters of FY2021/22, which
bodes well for meeting the primary balance target (minus 1 percent of GDP)
for the full fiscal year. Preparation of a budget for FY2022/23 is well
underway.
“Strong steps have been made in implementing structural reforms. The Fair
Credit Reporting Act, adopted by parliament in December, will support
financial sector development. The Minister of Finance issued regulations
for a procedural fiscal rule in December—a key milestone
towards enhancing fiscal sustainability. The Barbados Customs and Excise
Department took important steps to improve performance management, risk
management, and trade facilitation during 2021. Work has been initiated on
reforms to enhance the sustainability of the public sector pension scheme.
“The team is looking forward to conducting discussions for the seventh
review under the EFF in May and would like to thank the authorities and the
technical team for their openness and candid discussions.”
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