The IMF Has Approved Another US $48 Million for Barbados

The International Monetary Fund (IMF) has approved another drawdown of US $48 million for Barbados.

Following a two-week visit by one of its teams in November, the Bert van Selm-led delegation revealed that it had reached a staff level agreement with the government, and said that subject to approval from its Executive Board, Barbados would receive the funds.

That approval was announced in a statement issued by the IMF on December 16, 2019. In it, Deputy Managing Director, and Acting Chair Tao Zhang said:

“Barbados continues to make good progress in implementing its comprehensive homegrown economic reform programme. All quantitative performance criteria, indicative targets, and all structural benchmarks for end-September 2019 were met.

“The fiscal adjustment continues as programmed with the primary surplus targeted at 6 percent of GDP for FY2019/20 and subsequent years. This target for end-September 2019 was met by a significant margin, and the FY2019/20 budget provides a solid basis for reaching the target for the next fiscal year.”

The IMF Deputy Managing Director also commented on several planned and ongoing reforms, including the recently concluded external debt restructuring:

“Adequate social spending and an improved safety net to protect the most vulnerable members of society are key priorities of the programme. Social spending is being protected, preserving Barbados’ strong social safety net and limiting the impact of the stabilization programme on low-income households.

“A comprehensive public debt restructuring complements the fiscal consolidation. The recent agreement reached with commercial external creditors will help reduce uncertainty and improve prospects for investment. Under the programme’s macroeconomic framework, the restructuring agreement will facilitate reaching the 80 percent of GDP medium-term debt target in FY2027/28, and the 60 percent of GDP long-term anchor in FY2033/34.

“An improved governance framework of the Central Bank of Barbados would facilitate limiting monetary financing to the government, and strengthening the central bank’s mandate, autonomy, and decision-making structure. Measures to strengthen the AML/CFT regime would also be helpful.”

This drawdown brings the total disbursement from the IMF to approximately US $145 million.