## IMF Executive Board Concludes 2022 Article IV Consultation with Antigua and Barbuda _IMF News, May 31, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2022 Article IV Consultation with Antigua and Barbuda](https://www.imf.org/en/news/articles/2023/05/31/press-releaseimf-executive-board-concludes-2022-article-iv-consultation-with-antigua-and-barbuda) ## Other formats - [Markdown version](/en/news/articles/2023/05/31/press-releaseimf-executive-board-concludes-2022-article-iv-consultation-with-antigua-and-barbuda/index.md) - [Structured JSON version](/en/news/articles/2023/05/31/press-releaseimf-executive-board-concludes-2022-article-iv-consultation-with-antigua-and-barbuda/index.json) - [Bundle manifest](/en/news/articles/2023/05/31/press-releaseimf-executive-board-concludes-2022-article-iv-consultation-with-antigua-and-barbuda/bundle-manifest.json) ## Bibliographic details - Published: May 31, 2023 --- ### Economic recovery and recent performance - Real output contracted by 20 percent in 2020 due to the COVID-19 pandemic. - Growth is estimated at 5¼ percent in 2021, driven by a rebound in tourism and construction activity. - Inflation was subdued in 2021 due to price controls on utilities, fuels, and public transportation despite a surge in international energy prices. - Fiscal position improved in 2021 with a narrowing of the primary deficit as pandemic-related spending was wound down and better tax administration and higher external grants bolstered revenues. - Public debt peaked at 102 percent of GDP and is projected to decline to 91 percent of GDP in 2022. - The financial system remains stable, but bank credit to the private sector is weak. ### Outlook and projections - Real GDP is projected to expand by 6 and 5½ percent in 2022 and 2023 respectively, supported by strong tourist arrivals, foreign direct investment in the hospitality sector, and public sector projects. - Output is expected to return to pre-pandemic levels only by 2025 due to scarring effects of the pandemic. - Inflation is forecasted to accelerate to 8½ percent in 2022, reflecting pass-through from higher global food and fuel prices, before moderating to 4½ percent in 2023. - Risks to the outlook are tilted to the downside, including further commodity price shocks, a global growth slowdown, a resurgence of COVID, tighter global financial conditions, lower citizenship-by-investment program (CIP) revenues, and natural disasters. ### Fiscal position, financing, and arrears - Continued fiscal consolidation and growth recovery have helped improve the fiscal position, but outturns underperformed the targets envisaged in the government’s medium-term fiscal strategy. - Gross financing needs and arrears to domestic and external creditors remain high. - Securing long-term financing and preventing accumulation of new arrears are critical amid tight global financial conditions. - Authorities should maintain efforts to extend the maturity profile of debt in domestic and external markets to reduce rollover risks and engage closely with creditors to clear remaining arrears. ### Policy recommendations and structural reforms - Near-term fiscal policy: continue to protect the vulnerable against rising living costs through targeted support. - Implement a clear framework for coordination among government entities responsible for social safety net programs. - Allocate sufficient resources to complete and maintain a centralized beneficiary registry. - Pricing and subsidies: - Put in place an automatic fuel pricing mechanism with full pass-through of international prices, combined with targeted social protection programs, to move away from generalized, untargeted subsidies. - Revenue and fiscal consolidation: - Additional revenue mobilization is needed to achieve MTFS targets: limit tax exemptions, introduce new tax measures, and contain the wage bill. - Conduct a public sector employment census and develop a skills database as part of a longer-term strategy to address the wage bill. - Institutional and public financial management reforms: - Consider legislating the MTFS and Fiscal Resilience Guidelines to build political consensus. - Operationalize the Climate Resilience and Development Fund, Fiscal Resilience Oversight Committee, and single window system at customs. - Implement e-filing and e-payment of taxes and the amended Finance Administration Act and Procurement Administration Act. - Introduce a performance report card system for SOEs. - Develop a public financial management action plan based on the recent Public Expenditure and Financial Accountability self-assessment. - Pension and investment strategy: - Gradually increase the contribution rate and implement automatic adjustments to the retirement age in line with increasing life expectancy at retirement. - Revamp the investment strategy to address liquidity constraints and increase longer-term returns. - Financial sector and AML/CFT: - Monitor asset quality and provisioning buffers closely. - Formulate a national crisis management plan in collaboration with the ECCB. - Continue strengthening AML/CFT and CIP frameworks to protect correspondent banking relationships and integrity of the CIP. - Credit access and labor market: - Increase the role of the regional credit bureau and partial credit guarantee scheme to enhance credit quality and alleviate collateral constraints. - Modernize the insolvency law to incentivize lending. - Emphasize training, vocational education, skills certification, and job search assistance to reintegrate workers into the labor force. - Climate and energy: - Leverage donor resources and international financing for climate resilience projects given large investment needs and limited fiscal space. - Accelerate transition to renewables, supported by private sector financing, to reduce energy costs and improve competitiveness. ### Executive Board assessment highlights - Antigua and Barbuda’s economy is recovering but facing headwinds from multiple external shocks. - Higher food and fuel prices are raising inflation, eroding real incomes, and exacerbating fiscal and external imbalances. - The external position in 2021 was weaker than the level implied by medium-term fundamentals and desirable policies. - Continued reforms across fiscal policy, public financial management, pensions, financial stability, AML/CFT, CIP, credit access, labor market, and climate resilience are essential to restore resilience and support sustainable growth. ### Selected economic and social indicators (as reported) - Population (2021): 98,219 - Adult literacy rate (2015): 99 - GDP per capita (US$, 2021): 14,978 - Mean years of schooling (2021): 9.3 - Life expectancy at birth (years, 2021): 78.5 - Human Development Index rank (2021, of 191 economies): 71 - Mortality rate (under 5, per 1,000 live births, 2020): 6 ### Key macroeconomic projections and recent series (annual percentage change unless indicated) - Real GDP: 2020 -20.2; 2021 5.3; 2022 6.0; 2023 5.6; 2024 5.4; 2025 4.0; 2026 2.7 - Nominal GDP: 2020 -18.8; 2021 7.4; 2022 15.0; 2023 10.3; 2024 7.9; 2025 6.1; 2026 4.8 - Consumer prices (end of period): 2020 2.8; 2021 1.2; 2022 10.5; 2023 2.0 - Consumer prices (period average): 2020 1.6; 2021 8.5; 2022 4.5 - Broad money (M2) growth: 2020 -5.2; 2021 13.9; 2022 3.9 - Credit to private sector (annual change): 2019 1.3; 2020 -4.1; 2021 0.0; 2022 5.0 - Central government primary balance (percent of GDP): 2019 -3.8; 2020 -0.4; 2021 1.5; 2022 2.1 - Central government overall balance (percent of GDP): 2019 -4.0; 2020 -6.4; 2021 -4.8; 2022 -2.7; 2023 -3.4; 2024 -0.5 - Total revenue and grants (percent of GDP): 2021 20.6; 2022 20.9; 2023 20.2; 2024 21.2 - Total expenditure (percent of GDP): 2021 25.3; 2022 23.7; 2023 23.5; 2024 22.4; 2025 21.4 - Current account balance (percent of GDP): 2019 -7.5; 2020 -18.4; 2021 -15.0; 2022 -20.3; 2023 -14.1; 2024 -13.4 - Trade balance (percent of GDP): 2019 -34.2; 2020 -29.3; 2021 -33.7; 2022 -39.8; 2023 -37.5 - Nonfactor service balance (percent of GDP): 2019 35.1; 2020 25.6; 2021 26.0; 2022 29.1; 2023 33.6 - Gross tourism receipts (percent of GDP): 2019 53.5; 2020 30.1; 2021 37.1; 2022 45.4; 2023 46.0 - External public sector debt (percent of GDP): 2019 36.5; 2020 48.1; 2021 50.5; 2022 50.0; 2023 50.1 - Net imputed international reserves (US$ million): 2017 314; 2018 329; 2019 279; 2020 222; 2021 324; 2022 354; 2023 419; 2024 486; 2025 528; 2026 548; 2027 553 - Months of prospective imports (net imputed international reserves): 2017 3.3; 2018 4.4; 2019 4.6; 2020 3.3; 2021 4.4 - GDP at market prices (EC$ million): 2019 4,556; 2020 3,700; 2021 3,972; 2022 4,567; 2023 5,040; 2024 5,439; 2025 5,770; 2026 6,045; 2027 6,332 - Public debt stock (EC$ million): 2019 3,702; 2020 3,754; 2021 4,066; 2022 4,179; 2023 4,317; 2024 4,367; 2025 4,384; 2026 4,370; 2027 4,355 - Public debt (percent of GDP): 2019 81.3; 2020 101.5; 2021 102.4; 2022 91.5; 2023 85.7; 2024 80.3; 2025 76.0; 2026 72.3; 2027 68.8 *IMF Communications Department, Press Release No. 23/187 — IMF Executive Board concluded the 2022 Article IV consultation with Antigua and Barbuda on a lapse-of-time basis.* --- ## References - [Antigua and Barbuda and the IMF](http://www.imf.org/external/country/ATG/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/05/31/press-releaseimf-executive-board-concludes-2022-article-iv-consultation-with-antigua-and-barbuda_