The International Monetary Fund team has reached a staff-level agreement with Barbados on the completion of the fourth reviews of the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements. This is subject to the approval of its Executive Board next month.
If approved, the deal will unlock USD 19 million under the EFF and USD 38 million under the RSF for the island.
Reacting to the news, Minister in the Ministry of Finance, Ryan Straughn, said the IMF’s latest report signifies Government’s continued efforts to create an environment of confidence, both locally and internationally.
Speaking to the media at a press conference following a meeting with IMF Mission Chief Michael Perks and his team, Mr. Straughn stated: “We are very much focused on…ensuring that the reforms that we have undertaken, not just under this type of programme, but certainly what we started under the first programme, that these now are implemented and continue to be implemented.
“We will also continue to ensure that the growth trajectory remains solid, but equally that we are bringing the debt down to sustainable levels from what clearly has been unsustainable heights.”
The Minister also shared that the island received upgrades to its credit rating over the last few weeks from Fitch ratings, and from Standard and Poor’s rating agency and this signified a lowering of the financing of public and private sector projects to be executed going forward.
Elaborating further, he said Government was focused on meeting its targets to show that the increased activity across the island is a clear sign for Barbadians to see that “the programme, as supported by the IMF, is working to their benefit”.
“And therefore, we continue to focus on how do we mitigate against those things that clearly are happening internationally, that still continue to pose challenges, obviously, for consumers, not just in Barbados, but certainly, consumers across the world. It is important that the momentum that we have been able to create that we continue with that momentum, in order to give us any ‘wriggle room’ that may be required to respond to those challenges that may arise from time to time,” he stressed.
Mr. Straughn said Government was “very confident that the macroeconomy and the stability certainly has been achieved”, but cautioned that this was not taken for granted, given the numerous challenges faced over the last six years.
The Minister thanked the IMF for its support during the programme as he mentioned the benefits of the IMF’s key technical assistance missions to the island, for which Barbadians can see the benefits of “those specific interventions”.
“We will continue to focus on not just ensuring that the macro picture is solid, but that the recovery is as inclusive as it must be, because the [Barbados Economic Recovery and Transformation] programme has been crafted and designed to be an inclusive recovery framework,” Mr. Straughn asserted.
Meanwhile, Mr. Perks, in his review of the island’s economic performance, commended Barbados for the “dynamism” in the economy, particularly in the tourism and construction sectors.
The Mission Chief also stated that Barbados’ performance under the IMF arrangements “remained very strong” having met all of the quantitative targets for June and September.
“More importantly, the Government also looks well on track to meet this year’s fiscal targets after strong performance in the first half of the fiscal year. On the structural front, the benchmarks and the reform measures for the review have also been met,” Mr. Perks surmised.
Notwithstanding the island’s strong performance under the IMF arrangements, Mr. Perks cautioned that there were “downside risks” for Barbados due to its vulnerability to global shocks and natural disasters.