IMF delegation ends visit to Barbados
BRIDGETOWN, Barbados (CMC) – A delegation from the International Monetary Fund (IMF) Friday ended a three-day visit to Barbados aimed at reviewing recent economic developments and reform efforts and to prepare the ground for the fifth and final reviews of the Extended Fund Facility (EFF) / Resilience and Sustainability Facility (RSF) programmes.
Following the fourth review of the EFF and the RSF in December last year, it allowed for the island to receive an immediate disbursement equivalent to about US$19 million under the EFF and about US$37 million under the RSF.
Head of the delegation, Michael Perks said that Barbados’ economic growth remained robust in 2024 and that real gross domestic product (GDP) growth is estimated at four per cent driven by business services, tourism, and construction.
He said inflation moderated to an average of 1.4 per cent, reflecting an easing of global commodity prices and prices of domestic goods and services.
“The external position continued to strengthen, with the current account deficit narrowing to 4.5 per cent of GDP, from 8.6 percent in 2023. International reserves remain ample at US$1.6 billion, equivalent to over seven months of imports, providing continued strong support to the exchange rate peg.”
Perks said the near-term economic outlook remains positive, but risks continue to be high and tilted to the downside, given Barbados’ vulnerability to global shocks and natural disasters.
“The authorities continue to make strong progress in implementing their ambitious economic reform programme. Targets for end-December 2024 under the EFF were met. Fiscal performance remains strong, with the primary balance reaching 5.3 percent of GDP through December, leaving the authorities on track to meet the 3.8 per cent of GDP fiscal target for financial year 2024/25.”
Perks said preparation of the 2025/26 budget is now well underway and that public debt declined close to 100 per cent of GDP at end-2024 and the authorities remain firmly committed to bringing it down to 60 per cent of GDP by the financial years 2035/36.
“Structural reform efforts continue to advance, supported by IMF technical assistance, including actions to strengthen customs administration, the framework for public-private partnerships, and the Central Bank of Barbados’ liquidity forecasting.
“The authorities are also making progress with the implementation of the RSF reform measures for the last review,” Perks said, adding that the team is looking forward to conducting discussions for the fifth and final reviews under the EFF and RSF in May.
