A loan of US$75 million has been approved by the Caribbean Development Bank (CDB) to assist Barbados’ reform programme.
The loan is policy-based and will assist with restoring the macroeconomic strength of Barbados as it moves towards sustainable and inclusive growth, said the CDB.
Additionally, the loan, which will assist the Government of Barbados’ Economic Recovery and Transformation (BERT) plan, will assist in protecting its financial and social sectors, the regional body said.
“The Government of Barbados has demonstrated strong resolve and commitment to the plans and targets of its economic recovery and transformation plan. Public debt restructuring and fiscal restraint are making the debt burden more manageable.”– The Caribbean Development Bank
Policy-based loans are provided to respond to urgent needs resulting from external or internal economic imbalances such as debt crises and foreign reserve shortages.
“The operation will assist the Barbadian Government in some key areas of the reform programme, such as broad-based growth, social development, enhanced revenue administration, and improved financial management,” the CDB said today.
President of the CDB, Dr Wm Warren Smith, said the CDB loan will help to strengthen the Government’s financial performance “while safeguarding poor and vulnerable people.”
The country was recently commended by the International Monetary Federation which completed its second review of the programme.
At the time, the IMF said “The Barbadian authorities continue to make good progress in implementing the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal and debt sustainability, rebuilding reserves, and increasing growth. Since May 2018, international reserves have increased from a low of US$220 million (or five to six weeks of import coverage) to more than US$600 million at end-October 2019.”
The BERT programme is geared at mitigating diminishing reserves and increasing economic growth while protecting those most helpless.
“The Government of Barbados has demonstrated strong resolve and commitment to the plans and targets of its economic recovery and transformation plan. Public debt restructuring and fiscal restraint are making the debt burden more manageable,” the CDB said.
Projections by the CDB suggest that the island’s public debt will fall from 117.5 per cent of its gross domestic product this year and to 80 per cent over the next eight years.