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

IMF: Barbados makes “good progress” with economic reform programme

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

With Barbados’ international reserves climbing to US$740 million last December, the International Monetary Fund has commended the Caribbean island’s Government for taking steps to restructure its economy.

According to an IMF staff report, “Barbados continues to make good progress in implementing its economic reform programme. International reserves reached US$740 million at the end of 2019, from a low of US$220 million in May 2018.

The Central Bank of Barbados. (Photo: centralbank.org.bb)

“The completion of the external debt restructuring in December 2019 has reduced economic uncertainty, and the agreed terms with creditors will help to keep public debt on a clear downward trajectory. On December 11, 2019, Standard and Poor’s upgraded Barbados’ foreign currency sovereign credit rating from Selective Default to ‘B-‘,” the report continued.

The report follows a meeting between the Government of Barbados and an IMF team led by Bert van Selm, who visited Bridgetown from February 4-7. During the meeting, members from both teams discussed the implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF).

IMF Deputy Division Chief for the Caribbean Bert Van Selm (Photo: Caribbean Press Releases)

Subsequently, the IMF revealed that Barbados has met primary surplus targets of five per cent of gross domestic product over the first three quarters of fiscal year 2019/20. Further, the institution said the island is on track meet the six percent target set for the current quarter.

“All indicative targets for end-December under the EFF have been met. The program target for Net International Reserves was met by a wide margin, as was the target for the Central Bank of Barbados’ Net Domestic Assets,” the IMF staff report read.

Further, the IMF said that Barbados has made advancements in implementing structural benchmarks under the EFF. Among them, a revision of the Central Bank of Barbados law and preparation of FY2020/21 budget with a primary surplus target of six per cent of GDP.

“The team is looking forward to return to Barbados in May to conduct the discussions for the third review under the EFF and would like to thank the authorities and the technical team for their openness and candid discussions,” the IMF report ended.