At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a staff visit via videoconferencing between August 24-27, 2021 to discuss the 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 statement:
“Barbados’ economy remains severely depressed by the ongoing global coronavirus pandemic. Tourism activity has picked up in recent months but remains at a fraction of normal levels. The economy is estimated to have grown 5½ percent in the second quarter of 2021 (relative to Q2 2020). A category 1 hurricane (Elsa) 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.
“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. 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 team is looking forward to conducting discussions for the sixth review under the EFF in November and would like to thank the authorities and the technical team for their openness and candid discussions.”
