Barbados: Staff Report for 2013 Article IV Consultation
IMF Staff Country Reports, February 12, 2014
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- Barbados: Staff Report for 2013 Article IV Consultation
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Bibliographic details
- Published: February 12, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475557077.002
Summary
- Highlights Barbados’ weak economic performance and high public debt.
- Foreign reserves are under pressure as fiscal and external imbalances widened in 2012 and further in 2013.
- Authorities announced ambitious budget consolidation proposals in 2013 aimed at strengthening the fiscal position and arresting the slide in reserves.
- Recent fiscal measures, if fully implemented, should stabilize debt levels by 2016.
- Even with full implementation, fiscal financing pressures and external sector sustainability would remain challenging.
Key findings
- Economic performance described as weak, with widening fiscal and external imbalances in 2012 and 2013.
- Public debt identified as high and a central vulnerability.
- Foreign reserves under pressure due to the above imbalances.
- Recent fiscal measures have conditional effectiveness: full implementation is needed to achieve stabilization of debt by 2016.
Risks and scenarios
- Downside risks are considerable.
- Failure to implement corrective policies could result in a disorderly adjustment process.
- Even under the optimistic scenario of full policy implementation, significant challenges would persist for fiscal financing and external sector sustainability.
Policy implications and recommendations
- Urgent action required to address fiscal and external imbalances (as signaled by authorities’ 2013 consolidation proposals).
- Full implementation of announced fiscal measures is critical to stabilize debt levels by 2016.
- Given substantial downside risks, contingency planning and measures to safeguard external reserves and fiscal financing should accompany consolidation.
Barbados: Staff Report for 2013 Article IV Consultation, February 12, 2014 — International Monetary Fund.
Content in this bundle
- Barbados 2013 Article IV Consultation, IMF Country Report No. 14/52; January 27, 2014