IMF Delegation Concludes Visit to Barbados, Praises Economic Progress
Recent Economic Developments and Reform Efforts
A delegation from the International Monetary Fund (IMF) recently concluded 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) programs.
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.
Economic Growth and Outlook
The delegation’s head, Michael Perks, said that Barbados’ economic growth remained robust in 2024 and that real gross domestic product (GDP) growth is estimated at four percent, driven by business services, tourism, and construction.
He said inflation moderated to an average of 1.4 percent, reflecting an easing of global commodity prices and prices of domestic goods and services.
External Position and Reserves
“The external position continued to strengthen, with the current account deficit narrowing to 4.5 percent 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.”
Risks and Outlook
Perks said the near-term economic outlook remains positive, but risks remain high and tilted to the downside, given Barbados’ vulnerability to global shocks and natural disasters.
Reform Efforts and Progress
“The authorities continue to make strong progress in implementing their ambitious economic reform program. 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 percent GDP fiscal target for the financial year 2024/25.”
Perks said preparation of the 2025/26 budget is now well underway. Public debt declined close to 100 percent of GDP at the end of 2024, and the authorities remain firmly committed to bringing it down to 60 percent of GDP by the financial years 2035/36.
Structural Reform Efforts
“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.
Conclusion
The IMF delegation’s visit to Barbados highlights the country’s continued progress in implementing its economic reform program and its commitment to achieving its economic goals.
Frequently Asked Questions
- What was the purpose of the IMF delegation’s visit to Barbados?
The delegation was reviewing recent economic developments and reform efforts and preparing the ground for the fifth and final reviews of the Extended Fund Facility (EFF) / Resilience and Sustainability Facility (RSF) programs. - What were the key findings of the delegation?
The delegation found that Barbados’ economic growth remained robust, with real GDP growth estimated at four percent, and that the country’s external position continued to strengthen, with a narrowing current account deficit and ample international reserves. - What are the next steps for Barbados?
The authorities are preparing for the fifth and final reviews under the EFF and RSF in May, and are committed to implementing further structural reforms to achieve their economic goals.
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