||Central Bank Of Barbados
The International Monetary Fund (IMF) has completed a two-week visit to Barbados. The IMF team, which was headed by Bert van Selm, was in the island from November 5-15 to complete its 2019 Article IV mission to Barbados and the second review under the Enhanced Fund Facility (EFF).
At the end of the visit, the team issued a statement in which it confirmed that “The authorities’ BERT [Barbados Economic Recovery and Transformation] programme, supported by the IMF’s Extended Fund Facility, is on track.” It elaborated:
All programme targets for end-September 2019 under the EFF have been met. The program target for primary surplus was met by a comfortable margin, which bodes well for reaching the FY2019/20 primary surplus target of 6 percent of GDP. The Barbadian authorities also continue to make good progress in implementing structural benchmarks under the EFF.
The team also commented on the recently concluded external debt restructuring exercise:
The agreement reached in October 2019 between the government of Barbados and the external creditor committee reduces debt and uncertainty. The agreed terms will bring about an immediate reduction in public debt, with a 26 percent haircut on principal and accrued interest, and will support further debt reduction, with a lower interest rate. The terms of the new instrument will help Barbados reach its medium-term target of 80 percent debt/GDP by 2027/28, and 60 percent by 2033/34. The inclusion of a natural disaster clause in the new debt will help Barbados remain current on its debt obligations in the event of a natural disaster. By reducing uncertainty, the completion of the external debt restructuring improves prospects for investment.
At the conclusion of the visit, the IMF team and the government reached a staff level agreement related to Barbados’ performance under the EFF arrangement. This agreement is contingent on review and approval from the IMF’s Executive Board. Following this review, which is expected to take place in December, Barbados will receive another drawdown of approximately USD $48 million.
Read the full statement here.