CBR
search
Economy

An aerial view of Bridgetown, the capital of Barbados (Photo: businessinsider.com)

Barbados economic outlook ‘severely depressed’— IMF

An aerial view of Bridgetown, the capital of Barbados (Photo: businessinsider.com)

Despite making progress in its economic reform programme, Barbados still faces “severely depressed” conditions, according to the International Monetary Fund (IMF).

Responding to a request from the Government of Barbados, a team from the IMF, led by Mission Chief Bert van Selm, conducted a virtual staff visit by videoconferencing between August 24-27, 2021. Among the areas of the review were the implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF).

In this 2019 photo, Minister in the Ministry of Finance Ryan Straughn, Prime Minister of Barbados Mia Mottley and International Monetary Fund Resident Representative Dr Bert van Selm attend a press briefing on the first review of Barbados’ Economic Program under the Extended Fund Facility. (Photo: Twitter @bvanselm)

In a post-visit release, van Selm noted, “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 IMF official added that though the tourism sector is recovering, the sector will not realise significant improvement until the second half of 2021 into the first half of 2022. At the same, for the second quarter of 2021 the country’s economy grew by 5.5 per cent relative to the same period in 2020. 

Looking ahead, van Selm highlighted that the passage of Category 1 Hurricane Elsa, in July, which caused significant damage to the island’s housing, could impact growth for the rest of the year. Notwithstanding, he added that Barbados’s economic growth over the next 12 months is contingent on the gradual recovery of tourism.

The seal of the International Monetary Fund is seen at the headquarters building in Washington, DC, USA.
(Photo: MANDE:L NGAN/AFP/Getty Images)

Turning his attention to the BERT plan, van Selm stated: “In 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. Indicative targets for end-June under the EFF were met.”

According to the IMF mission chief, Barbados stands to receive US$129 million from the fund’s latest Special Drawing Rights allocation of US$650 billion. This disbursement will further boost the Caribbean country’s international reserves to more than US$1.4 billion. 

“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,” van Selm concluded.