The homegrown austerity plan, the Barbados Economic Recovery and Transformation programme – BERT – continues to receive the green light from the International Monetary Fund.
As its latest four-day mission to Bridgetown wrapped up today, an IMF team led by Bert Van Selm praised the progress of the programme which was implemented last year under the IMF’s Extended Fund Facility (EFF).
The team, which came at the request of Government, issued the report card following today’s meeting with Prime Minister Mia Mottley.
Van Selm reported: “Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme.
“All indicative targets for end-June under the EFF have been met. The target for the Government’s primary surplus was met with a wide margin, with the Government running a primary surplus of 2.5 per cent of (annual) GDP in the first quarter of FY2019/20.
“This bodes well for achieving the Government’s primary surplus target of six per cent of GDP for FY2019/20. International reserves were also well over program targets at end-June.”
Van Selm said the IMF was also satisfied with Government’s revamped tax system, as well as its progress in finding a solution to satisfy external creditors.
He revealed that a team from the IMF would be returning to Barbados in November to continue their evaluation.
He added: “Good progress has been made in implementing end-June and July 2019 structural benchmarks under the EFF.
“The authorities have completed a review of the tax system and the Governor-General has proclaimed the recently enacted Financial Management and Audit Act.
“Progress also being made by the authorities in furthering good-faith discussions with external creditors is welcomed. Continuing open dialogue and sharing of information will remain important in concluding an orderly debt restructuring process.
“The team is looking forward to returning to Barbados in November to conduct the discussions for the Article IV and second review under the EFF and would like to thank the authorities and the technical team for their openness and candid discussions.”
Prime Minister Mottley introduced BERT shortly after being elected to office in May last year – a three-phase, five-year package of austerity and stimulus measures aimed at avoiding a devaluation of the Barbados dollar.
The first phase reviewed tax revenue, imposed new domestic and international user fees, removed three statutory corporations from the Consolidated Fund, chased down greater tax compliance, and broaden the tax base on visitors.
Phase two has sought to cut spending in Central Government and state-owned enterprises, while the final phase is to determine what spending is essential, what is highly desirable and what is optional.