IMF Reaches Staff Level Agreement on the First Review of Barbados’ Economic Program under the Extended Fund Facility
May 17, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- A staff-level agreement was reached between the IMF staff and theBarbadian authorities on the First review of Barbados’ Economic Recoveryand Transformation program (BERT) supported by the Extended Fund Facility.
- Barbados continues to make good progress in implementing its ambitiousand comprehensive economic reform program.
At the request of the Government of Barbados, an International Monetary
Fund (IMF) team led by Bert van Selm visited Bridgetown from May 7–17, 2019
to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT)
plan, supported by the IMF under the Extended Fund Facility (EFF). To
summarize the mission’s findings, Mr. van Selm made the following
“Following productive discussions, the IMF team and the Barbadian
authorities reached staff-level agreement on the completion of the first
review under the EFF arrangement. The agreement is subject to approval by
the IMF Executive Board, which is expected to consider the review in June.
Upon completion of the review, SDR 35 million (about US$49 million) will be
made available to Barbados, bringing the total disbursement to SDR 70
“Barbados continues to make strong progress in implementing its ambitious
and comprehensive economic reform program. International reserves, which
reached a low of US$220 million (5–6 weeks of import coverage) at end-May
2018, have more than doubled since then. The rapid completion of the
domestic part of a debt restructuring has been very helpful in reducing
economic uncertainty, and the new terms agreed with creditors have put debt
on a clear downward trajectory. The authorities have started the reform of
State-Owned Enterprises (SOEs) by tightening reporting requirements and
shedding excess staff.
“All program targets for end-March under the EFF have been met. The program
target for Net International Reserves was met by a wide margin, as was the
target for the Central Bank of Barbados’ Net Domestic Assets (NDA). The
targets for the primary surplus, central government grants to SOEs, central
government domestic arrears, and social spending were also met.
“In March, parliament adopted a budget FY2019/20 targeting a primary
surplus of 6 percent of GDP. Full year effects of reforms set in motion
during FY2018/19, including the introduction of several new taxes (an
airline travel fee, room levies, a new fuel tax, and a new health service
contribution), should help achieve this target. A broadening of the base of
the VAT and the land tax, adopted in March 2019 in the context of the
FY2019/20 budget, will help support revenue. The budget approved for
FY2019/20 provides a solid basis for the targeted fiscal consolidation; the
authorities stand ready to take additional measures if necessary to reach
the targeted 6 percent primary surplus.
“The Barbadian authorities continue to make good progress in implementing
structural benchmarks under the EFF, including those that contribute to an
improved business climate such as a new Planning and Development Act passed
in January 2019 and a Sandbox regime to regulate fintech start-ups set up
in October 2018. A new Public Financial Management Act passed in January
2019 introduced wide-ranging measures to strengthen fiscal transparency and
accountability. The government has also introduced a system for monitoring
SOE arrears on an ongoing basis and has submitted a consolidated report on
the performance of SOEs to parliament.
“Progress being made by the authorities in furthering good-faith
discussions with external creditors is welcome. Continuing open dialogue
and sharing of information will remain important in concluding an orderly
debt restructuring process.
IMF Communications Department
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org