SOURCE: CMC – A delegation from the International Monetary Fund (IMF) Friday ended a visit to the island, indicating that the Barbados economy “remains severely depressed” as a result of the ongoing global coronavirus (COVID019) pandemic.
The IMF delegation, headed by Bert van Selm had conducted a staff visit via videoconferencing between August 24-27 at the invitation of the Barbados government of Prime Minister Mia Motley.
According to a statement issued here, while tourism is expected to recover gradually in the second half of 2021 and the first half of 2022, risks to the outlook remain.
But the IMF official said that despite this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme, while expanding critical investments in social protection.
It said indicative targets under the IMF’s Extended Fund Facility (EFF)-supported programme for end-June 2021 were met, and since then international reserves have been further boosted by the recent global special drawing rights (SDR) allocation.
The head of the IMF delegation said that the tourism activity has picked up in recent months but remains at a fraction of normal levels.
“The economy is estimated to have grown 5.5 per cent in the second quarter of 2021 relative to the second quarter of 2020,” he said, noting that Hurricane Elsa, a category one storm struck Barbados in July and caused significant damage to the island’s housing.
“Economic growth for the second half of 2021 and the first half of 2022 is premised on a gradual recovery of tourism,” the IMF official added.
He said in this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection.
“Indicative targets for end-June under the EFF were met. The global SDR allocation that became effective on August 23, 2021, including an allocation of about US$129 million to Barbados, has further boosted international reserves, to more than US$1.4 billion.
“”Structural reforms are ongoing, and structural benchmarks under the EFF were met. The government developed plans to recapitalize the Central Bank of Barbados and address medium and long-term challenges for the National Insurance Scheme (NIS) stemming from the debt restructuring and the COVID pandemic, and recapitalization of the NIS has started.”
He said that a medium-term fiscal framework was tabled in Parliament to enhance transparency and accountability in fiscal policy, while retaining sufficient flexibility to respond to the pandemic and other economic shocks.
The IMF official said that the delegation is looking forward to conducting discussions for the sixth review under the EFF in November.
Barbados entered into a four-year US$290 million EFF arrangement with the IMF in October 2018 and following a virtual mission between May 3-7, the Washington-based financial institution said then that the island would receive US$24 million.