IMF Staff Country Reports

This paper highlights Barbados’ 2023 Article IV Consultation and Second Reviews under the Arrangement under the Extended Fund Facility Arrangement and Arrangement under the Resilience and Sustainability Facility. Barbados continues to advance the implementation of its comprehensive economic reform program and climate policy agenda. The economy is expected to continue growing and inflation to moderate, with real gross domestic product and tourism returning to pre-pandemic levels in the near term. The current account deficit is expected to narrow as tourism and commodity prices fully normalize. Ample international reserves continue supporting the exchange rate peg, which remains a key anchor for macroeconomic stability. The authorities are working on enhancing their monetary policy toolkit and financial sector oversight. The authorities are advancing their ambitious climate policy agenda to increase resilience to climate change and green the economy. Important reforms are being implemented to achieve these objectives, including by incorporating climate considerations into the budget process, improving the disaster risk management framework, providing incentives for the purchase of electric vehicles, and addressing regulatory gaps to facilitate investments in renewable energy. The climate policy reforms are expected to help create an enabling environment that facilitates the mobilization of climate finance and private sector investment in climate-related projects.