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The seal of the International Monetary Fund is seen at the headquarters building in Washington, DC on July 5, 2015. The euro was dropping against the dollar after early results of the Greece bailout referendum suggested the country rejected fresh austerity demands from EU-IMF creditors. AFP PHOTO/MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)

IMF offers Barbados increased drawdown

The seal of the International Monetary Fund is seen at the headquarters building in Washington, DC on July 5, 2015. The euro was dropping against the dollar after early results of the Greece bailout referendum suggested the country rejected fresh austerity demands from EU-IMF creditors. AFP PHOTO/MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)

Following the conclusion of its fourth review of the extended arrangement under the Extended Fund Facility (EFF) for Barbados, the executive board of the International Monetary Fund (IMF) has offered the island nation a drawdown of approximately US$94 million.

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

The drawdown figure represents a 51 per cent increase in Barbados’s drawdown quota and more so an expression of the IMF’s confidence in how the Government has managed the affairs of the country, especially in the context of the COVID-19 epidemic.

According to IMF Deputy Managing Director Tao Zhang, “The Barbadian authorities continue to make excellent progress in implementing their Fund-supported Economic Recovery and Transformation plan and have swiftly responded to address the impact of the pandemic. Prospects for continued strong programme performance are good, but downside risks will continue to pose challenges in the period ahead.”

International Monetary Fund Deputy Managing Director and Acting Chair Tao Zhang says Barbados has made “excellent progress” in implementing its economic recovery and transformation plan. (File photo)

For the fiscal year 2020/21, the IMF anticipates that the pandemic will continue to negatively impact the Caribbean island’s balance of payments and the fiscal accounts. In particular, the IMF director said the board anticipates that the Barbados authorities will collect less revenues due to reduced tourism activities while increasing expenditure on health care and social protection.

Still, the IMF commended the Barbados Government on of initiatives it is pursuing to meet primary balance and debt-to-gross domestic product targets; among them the reform of state-owned enterprises (SOE) to secure space for investment in physical and human capital. In addition, the Government has introduced legislation that aims to strengthen the “central bank’s mandate, autonomy, and decision-making structures”.

Barbados Parliament building in the island’s capital of Bridgetown (File photo)

“A strong recovery from the global pandemic will hinge on accelerating structural reform, including improving the business climate and promoting economic diversification. Strengthening resilience to natural disasters and climate change will be key to long-term sustained economic growth,” the IMF managing director pointed out.