Barbados Continues to Make Good Progress in Implementing its Comprehensive Economic Reform Programme

The International Monetary Fund says that Barbados continues to make good progress in implementing its comprehensive economic reform program but faces economic challenges owing to the ongoing global pandemic. At the conclusion of a virtual staff visit led by Mission Chief, Bert van Selm, the IMF stated that while Barbados was successful in containing the outbreak during 2020, renewed COVID-19 waves weigh on a nascent economic recovery. The outlook remains highly uncertain, and risks are elevated.

“Prior to the pandemic, the government met its primary surplus target of 6 percent of GDP in FY2019/20. The impact of the pandemic on government finances reduced the primary balance to minus 1 percent of GDP in FY2020/21. The authorities are targeting a similar primary deficit in the current fiscal year (FY2021/22), with tourism still well below normal levels, and additional spending related to the twin shocks of volcanic ashfalls and Hurricane Elsa. The authorities are expected to resume fiscal consolidation required to achieve long-term fiscal objectives starting in FY2022/23.”

The IMF team stated further that despite the challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme, while expanding critical investments in social protection. “Indicative targets for end-June under the EFF were met. The global SDR allocation that became effective on August 23, 2021 (including an allocation of about US$129 million to Barbados) has further boosted international reserves to more than US$1.4 billion”, the Fund’s release stated.

The team reported also that structural reforms to transform the state-owned enterprise (SOE) sector have been undertaken.

“Reforms under the authorities’ comprehensive economic reform program included upfront cost savings measures as well as strengthened oversight and accountability frameworks to improve SOE performance and limit fiscal risks.”

The staff visit to discuss the implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF) took place between November 1 and 5.

For the full statement, visit here:
Barbados: Staff Concluding Statement of the 2021 Article IV Mission and Sixth Review under the Extended Fund Facility (imf.org)