WASHINGTON, DC – The International Monetary Fund (IMF) Friday said it will make available immediately a total of US$56 million to Barbados after its executive board concluded the third review of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
The Washington-based financial institution said that Bridgetown would receive US$19 million under the EFF and US$37 million under the RSF.
This brings total disbursements under the EFF to US$75 million and US$112 million under the RSF
The IMF’s executive board said that the island’s economy has recovered to pre-pandemic levels and the external position has improved. It said the gross domestic product (GDP) growth is expected to remain strong in 2024, driven by dynamism in tourism and related sectors.
The board said that the Barbadian economy last year grew by an estimated 4.4 per cent, driven by a rebound in tourism and related sectors. It said inflation moderated gradually with the easing of international commodity prices but remained somewhat elevated due to higher prices of certain domestic crops, reflecting adverse weather conditions and stronger demand for tourism-related services.
The external position strengthened, with the current account deficit narrowing to nine per cent seven months of imports – continuing to support the exchange rate peg,” the IMF said.
It said that GDP growth is expected to remain strong in 2024, driven by further growth in tourist arrivals. Inflation is projected to moderate to 3.1 per cent by end-2024, in line with global commodity price trends and the recovery in domestic agricultural production.
The Washington-based financial institution said the current account deficit is expected to narrow further to 7.4 per cent of GDP.
“Nevertheless, risks to the outlook remain elevated, with Barbados remaining vulnerable to potential global economic and financial shocks and natural disasters. These risks are mitigated by the authorities’ excellent track record of implementation and strong commitment to reform.”
The IMF said programme performance remains strong. All quantitative performance criteria and indicative targets for the third review of the EFF were met and that Barbados exceeded the primary surplus target for the financial year 2023/24 and are targeting four per cent of GDP for financial year 2024/25.
It said public debt has fallen back to pre-pandemic levels and the authorities remain committed to bringing it down to 60 percent of GDP by financial year 2035/36.
“The authorities met key structural benchmarks, including reforms to state-owned enterprises, the public pension scheme, the tax and customs exemption regimes, public procurement processes, and public financial management.
“The two RSF reform measures set for the third review were also implemented, supporting the government’s ambitious climate-policy agenda. A new Stormwater Management Act to improve flood resilience was tabled in Parliament and an Energy Efficiency and Conservation Policy Framework for government agencies and public lighting was approved by Cabinet,” the executive board noted.
