Performance Criteria for Barbados’ IMF-Supported Programme

The Government of Barbados’ IMF-supported Extended Fund Facility (EFF) programme requires Government’s commitment to meet certain conditions, comprising a combination of quantitative performance criteria, indicative targets and structural reform benchmarks. These conditions will be monitored and reviewed by the IMF every six months beginning March 15, 2019.

The indicative targets include a floor on certain social expenditures and a ceiling on central Government domestic arrears. The quantitative performance criteria relate to the following:

• Floor on Central Government primary balance (excluding repayment of central Government arrears)
• No increase in Central Government arrears (excluding arrears from non-payment of public debt
• Ceiling on transfers and grants to public institutions
• Ceiling on stock of public debt
• Ceiling on Net Domestic Assets of Central Bank
• Floor on Net International Reserves of Central Bank

The structural reforms are especially important as they create the conditions for growth and sustainability over the medium term. Included in the proposed reforms are a comprehensive review of the tax system, public pension reforms, legislation for the introduction of fiscal rules to lock in the gains arising from the fiscal consolidation and amendments to the Central Bank Act to strengthen overall autonomy and limit future central bank financing. The benchmarks for December 2018 are set out below: 

Reforms of State-Owned Enterprises (SOEs)

• Revised Financial Management and Audit Act to provide greater oversight over SOEs by the Ministry of Finance and Economic Affairs
• SOEs to provide standardised quarterly and financial reports
• Launch of training and outplacement programme to mitigate effects on the vulnerable from the restructuring of SOEs

Strengthen Public Financial Management

• Establish a binding budget calendar that envisages budget approval prior to fiscal year

Strengthen Revenue Policy and Administration

• The large taxpayer unit to update large tax payer accounts and to commence audits, targeting the most current tax period 

Enhancement of Growth and Business Climate

• New Town & Country planning legislation
• Establishment of a regulatory sandbox regime for regulating Fintech start-ups