IMF Reaches Staff-Level Agreement with Barbados Government

Delegation Reaches Agreement on Economic Recovery and Transformation Plan

A delegation from the International Monetary Fund (IMF) has reached a staff-level agreement with the Barbados government that could result in US$57 million in funding after discussing the implementation of the island’s Economic Recovery and Transformation (BERT 2022) plan, supported by the IMF under the Extended Fund Facility (EFF).

The delegation, headed by Michael Perks, ended its seven-day visit here on Wednesday. It also discussed the implementation of reform measures under the Resilience and Sustainability Facility (RSF) arrangement.

Agreement Subject to IMF Executive Board Approval

“Following productive discussions, the IMF team and the Barbadian authorities reached a staff-level agreement on the completion of the fourth reviews of the EFF and the RSF arrangements with Barbados,” Perks said.

He said the agreement is subject to approval by the IMF Executive Board, which is expected to consider the reviews in December.

Economic Growth and Outlook

Perks said that between January and September this year, the Barbadian economy grew by an estimated 3.9 percent year over year, driven by dynamism in the tourism and construction sectors.

He said that while Hurricane Beryl caused significant damage to some coastal infrastructure and the fishing sector, its macroeconomic impact is expected to be moderate, in part because it occurred during the off-peak tourist season.

Program Performance and Debt Reduction

Perks said that program performance remains strong, with all quantitative performance criteria and indicative targets for the fourth review of the EFF met. Public debt declined to around 105 percent of revised GDP by September 2024, and the authorities remain firmly committed to bringing debt down to 60 percent of GDP by fiscal year 2035/36.

Structural Reforms and Climate Policy

The Barbadian authorities continue to advance structural reforms, supported by technical assistance from the Fund and development partners. Key structural benchmarks were met, including measures to strengthen tax and customs administration, improve public financial management, and enhance public investment and procurement.

Efforts envisaged in the BERT plan to strengthen growth and the business environment are also progressing. The government is making good progress with its ambitious climate-policy agenda, supported by the RSF arrangement.

Conclusion

The IMF’s staff-level agreement with the Barbados government is a significant step forward in the country’s economic recovery and transformation. The agreement provides a framework for the implementation of reforms and the mobilization of funding to support the country’s economic growth and development.

FAQs

Q: What is the IMF’s staff-level agreement with the Barbados government?
A: The agreement is a framework for the implementation of reforms and the mobilization of funding to support the country’s economic growth and development.

Q: What is the BERT 2022 plan?
A: The BERT 2022 plan is the Barbados government’s economic recovery and transformation plan, supported by the IMF under the Extended Fund Facility (EFF).

Q: What is the Resilience and Sustainability Facility (RSF) arrangement?
A: The RSF arrangement is a facility that provides financing and technical assistance to support the implementation of reforms and the mobilization of funding to support the country’s economic growth and development.

Q: What is the IMF’s role in the agreement?
A: The IMF is providing technical assistance and financing to support the implementation of reforms and the mobilization of funding to support the country’s economic growth and development.