The International Monetary Fund (IMF) and the Government of Barbados have reached a staff-level agreement on a new 36-month precautionary Stand-By Arrangement (SBA) aimed at strengthening the country’s economic resilience and supporting its long-term transformation agenda.
Under the proposed agreement, Barbados would gain access to SDR 189 million, equivalent to approximately US$260 million, pending approval by the IMF Executive Board, which is expected to review the request in June.
The arrangement is designed to provide financial protection against external shocks in an increasingly uncertain global environment, while helping the country maintain macroeconomic stability and continue reforms under the Barbados Economic Recovery and Transformation Plan 2026 (BERT 2026).
According to the IMF, Barbados enters the proposed program from a position of improved economic credibility. The country recorded solid economic growth in 2025, supported mainly by tourism, construction, and business services. Growth was estimated at 2.7 percent, while inflation moderated to an average of 0.9 percent and the labor market remained strong.
Fiscal performance also continued to improve. The fiscal primary surplus reached 4.2 percent of GDP during FY2025/26, while public debt remained on a downward trajectory. In addition, Barbados successfully returned to international capital markets in 2025, marking a significant milestone in its economic recovery process.
International reserves remained robust at approximately US$1.5 billion by the end of 2025, equivalent to around six months of imports, providing continued support for the country’s exchange rate peg.
The IMF highlighted that BERT 2026 represents the next phase of Barbados’ reform strategy, shifting focus from stabilization and recovery toward long-term transformation. The plan prioritizes productivity, competitiveness, fiscal sustainability, financial market development, human capital strengthening, and climate resilience.
Leading the IMF mission, Michael Perks stated that the precautionary SBA would help Barbados maintain prudent macroeconomic management while advancing structural reforms.
The IMF also warned that the outlook remains exposed to external risks, including global policy uncertainty, higher commodity prices, and the country’s vulnerability to natural disasters. Nevertheless, economic growth is expected to remain positive in 2026, supported by tourism-related construction projects and increased public investment.
The Fund emphasized that maintaining disciplined fiscal policies will be essential to keeping public debt on track to reach the government’s target of 60 percent of GDP by FY2035/36, while preserving fiscal space for investment, resilience-building, and social programs.
The agreement follows Barbados’ successful implementation of previous BERT programs, which were supported by earlier IMF arrangements and contributed to rebuilding international reserves, improving fiscal accounts, and advancing reforms in state-owned enterprises and the pension system.
