Barbados, passing latest IMF test to get millions

The way is clear for Barbados to draw down $48 million (US$24 million) from the International Monetary Fund as the IMF board completes the fifth review of its Extended Fund Facility to the country.   

This will bring the total disbursements to around $830 million (US$415 million) since the four-year bailout of the country’s public finances was approved in October 2018.

IMF Deputy Director and acting Chair Tao Zhang said despite major challenges from the COVID-19 pandemic, Barbados continues to make “strong progress” in implementing its homegrown Economic and Recovery Transformation plan, BERT.

The IMF has given its blessing to the current financial measures, pointing out that “the lower primary balance target, financed by additional support from international financial institutions, is appropriate to accommodate worse-than-anticipated revenue losses and support spending on public health and social protection”.

It added that the delay in achieving the 60 per cent of GDP debt anchor by two years would avoid jeopardizing economic growth and social cohesion but stressed that Government must continue to maintain “ambitious primary surpluses” over the medium and long term to safeguard debt sustainability.

The Washington-based financial institution noted that Bridgetown is committed to a number of key targets including lowering transfers to state-owned enterprises and pension reform.

It noted its approval of the amended central bank law which will limit the bank’s financing of Government and welcomed Barbados’ removal from the European Union list of non-cooperative tax jurisdictions even as it urged authorities to fully implement the Financial Action Task Force plan that would allow the island to exit its gray list.

The IMF stressed that a strong “recovery after the global pandemic will depend on accelerating structural reforms to improve the business climate and facilitate green and digital transformation. Strengthening resilience to natural disasters and climate change is key to achieving long-term sustainable economic growth”. (BT)