## IMF Executive Board Approves US$113 million under the Extended Fund Facility and US$189 million under the Resilience and Sustainability Facility for Barbados

_IMF News, December 7, 2022_

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**Canonical URL:** [IMF Executive Board Approves US$113 million under the Extended Fund Facility and US$189 million under the Resilience and Sustainability Facility for Barbados](https://www.imf.org/en/news/articles/2022/12/07/pr22417-barbados-imf-executive-board-approves-usd113m-under-eff-and-usd189m-under-rsf)

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## Bibliographic details
- Published: December 7, 2022

---

### Program approvals and financing
- Approved arrangements:
  - Extended Fund Facility (EFF): 36-month arrangement in the amount equivalent to SDR 85.05 million (about US$113 million).
  - Resilience and Sustainability Facility (RSF): arrangement in the amount equivalent to SDR 141.75 million (about US$189 million).
- Purpose: to maintain and strengthen macroeconomic stability, support the structural reform agenda, and increase resilience to climate change.

### Economic context and recent performance
- Barbados has implemented a comprehensive Economic Recovery and Transformation (BERT) plan and completed a 2018-22 EFF.
- Despite global and regional economic shocks, Barbados has pursued fiscal consolidation, comprehensive debt restructuring, and structural reforms that restored macroeconomic stability in 2018 and 2019.
- The economy is starting to recover from the COVID-19 pandemic, but risks remain elevated due to:
  - Higher global commodity prices pushing up inflation.
  - Exposure to climate change and natural disasters for the tourism-dependent economy.
  - Global coronavirus pandemic and Russia’s invasion of Ukraine affecting the external environment.
- Public debt trajectory:
  - Public debt was put back on a clear downward trajectory starting FY2021/22.

### Program objectives and key targets
- Maintain and strengthen hard-won macroeconomic stability.
- Support unfinished structural reform agenda and unlock growth potential.
- Fiscal target:
  - Program targets a primary surplus of 2 percent of GDP in FY2022/23, up from minus 1 percent of GDP recorded in both FY 2020/21 and FY 2021/22.
- Structural reforms highlighted:
  - Strengthening of tax and customs administration.
  - Strengthening Public Financial Management (PFM).
  - Adoption and implementation of pension reform.
  - Rationalization and consolidation of State-Owned Enterprises (SOEs).
  - Growth-enhancing measures, including additional steps to improve the business climate.

### RSF-specific objectives and measures
- RSF financing to support climate change adaptation and mitigation and Barbados’ transition goals.
- Country ambition:
  - Transition to a fully renewable-based economy by 2030.
- RSF reforms include:
  - Mainstreaming of climate change in the budget.
  - Introduction of "green Public Financial Management", including in procurement.
  - Measures to incentivize private sector investments in climate resilient infrastructure and renewable energy projects.
- Coordination:
  - RSF measures were identified in close coordination with the World Bank and other international partners.

### Risks and outlook
- Inflation has been rising since the second half of 2021 owing to supply chain disruptions and increasing global food and oil prices.
- Economic recovery is expected to continue over the medium term, but downside risks to the outlook remain high.

### Executive Board statement (Kenji Okamura, Deputy Managing Director and Acting Chair)
- Barbados continues to make good progress implementing its homegrown Economic Recovery and Transformation Plan despite a very challenging global economic environment.
- The combination of fiscal consolidation, comprehensive debt restructuring, and structural reforms created space for a countercyclical policy response to the COVID-19 pandemic in 2020 and 2021.

*Press Release No. 22/417, December 7, 2022 — International Monetary Fund*

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## References

- [Kenji Okamura](https://www.imf.org/en/About/senior-officials/Bios/kenji-okamura)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Barbados and the IMF](http://www.imf.org/external/country/BRB/index.htm)
- [Russian Federation and the IMF](http://www.imf.org/external/country/RUS/index.htm)
- [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/12/07/pr22417-barbados-imf-executive-board-approves-usd113m-under-eff-and-usd189m-under-rsf_