IMF Reaches Staff-Level Agreement with Barbados on a Precautionary Stand-by Arrangement

IMF News, May 14, 2026

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IMF staff and the Barbadian authorities reached a staff-level agreement on a 36-month precautionary Stand-By Arrangement (SBA).
The arrangement—subject to approval by the IMF Executive Board—will enable Barbados to access SDR 189 million (about US$ 260 million).
The IMF Executive Board is expected to consider the request in June.
The SBA is intended to provide insurance in a shock-prone external environment while helping preserve macroeconomic stability and supporting reforms under the homegrown Barbados Economic Recovery and Transformation Plan 2026 (BERT 2026).

IMF team led by Mr. Michael Perks visited Barbados during May 4-14 to conduct the 2026 Article IV Consultation and discuss BERT 2026 and a possible 36-month precautionary SBA.
Press Release No. 26/151; published May 14, 2026.
End-of-Mission statement: views reflect preliminary findings of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

2025 outcomes:
- Growth estimated at 2.7 percent, driven by tourism, construction, and business services.
- Inflation averaged 0.9 percent.
- Current account deficit reached 5.7 percent of GDP.
- Foreign direct investment strengthened significantly, supporting the balance of payments.
- Gross international reserves remained at about US$1.5 billion at end-2025 (equivalent to around 6 months of imports).
- Fiscal primary surplus reached 4.2 percent of GDP in FY2025/26, with high corporate income tax revenues enabling an expansion of public investment in infrastructure and resilience.
Near-term outlook:
- Growth is expected to remain positive in 2026, though at a more moderate rate, as external headwinds are partly offset by tourism-related construction and rising public investment.
- Higher commodity prices are expected to place upward pressure on inflation and the current account deficit.
- International reserves are projected to remain ample.
- External conditions are expected to normalize thereafter, but the outlook remains subject to unusually high uncertainty, with risks tilted to the downside.

Arrangement size and duration: 36-month SBA for SDR 189 million (about US$ 260 million).
Mission dates: May 4-14.
Growth in 2025: 2.7 percent.
Inflation in 2025: 0.9 percent.
Current account deficit: 5.7 percent of GDP.
Gross international reserves: about US$1.5 billion at end-2025 (equivalent to around 6 months of imports).
Fiscal primary surplus in FY2025/26: 4.2 percent of GDP.
Public debt target: reach 60 percent of GDP by FY2035/36.

Maintain prudent macroeconomic management to anchor stability while supporting the BERT 2026 transformation agenda.
Fiscal policy guidance:
- Balance debt sustainability with development needs.
- Sustain strong primary fiscal balances to keep public debt on track to reach the 60 percent of GDP target by FY2035/36.
- Maintain fiscal space for critical investment, resilience, and social spending.
- Ensure any fiscal measures responding to external shocks are temporary, targeted to the most vulnerable, and consistent with the fiscal anchor.
Reserve and exchange rate policy:
- Disciplined fiscal policy to help maintain ample international reserves and support the exchange rate peg, which remains an essential anchor for macroeconomic stability.
Structural reforms to build policy credibility and strengthen institutions, including efforts to enhance:
- Public financial management, including the fiscal framework, management of public-private partnerships and SOE oversight.
- Revenue policy and administration.
- Productivity and competitiveness.
- Climate resilience.
- Financial supervision.
- The AML/CFT framework.
Technical assistance from the Fund and other partners will support the structural reform agenda.

Barbados enters the proposed arrangement from a position of strengthened macroeconomic credibility:
- Solid growth and moderated inflation in 2025.
- Strong fiscal performance and a declining public debt trajectory.
- Ample international reserves and a successful return to international capital markets in 2025.
The SBA is intended to provide insurance against external shocks while continuing to anchor macroeconomic stability and support the BERT 2026 Plan’s focus on boosting productivity and competitiveness, strengthening fiscal sustainability, deepening financial markets, strengthening human capital, and enhancing climate resilience.

Source: IMF press release, May 14, 2026.