The Inter-American Development Bank on Thursday approved the disbursement of a US$120-million loan to Barbados, which will strengthen its health and economic response to the COVID-19 crisis.
In particular, the loan will support household income and business liquidity, as well as define a social, economic and fiscal plan to reactivate the Barbados economy.
Based on the terms of the loan agreement, the Government will use the proceeds of the loan to, among other things, purchase of medicine, medical supplies and equipment. In addition, the Barbados authorities will support temporary measures to protect household income and provide businesses with working capital as the pandemic continues to create a fallout in the economy, especially tourism, one of the country’s biggest economic sectors.
“The loan will also support the planning and design of fiscal and economic measures that will help the country recover in the post-pandemic period, including measures to simplify taxes, increase government revenues, control spending, and improve tax management and customs enforcement capabilities,” a release from the bank outlined.
According to the IDB, the US$120-million loan is the first of a two-step programme with Barbados to improve the efficiency and effectiveness of the country´s public policy and fiscal management in response to COVID-19 crisis, through the design and implementation of effective and fiscally responsible policy measures.
The IDB loan has a 20-year tenure, with a 5.5-year grace period and an interest rate based on LIBOR.