BRIDGETOWN, Barbados, CMC – The International Monetary Fund (IMF) predicts that economic recovery in Barbados will continue this year after growing by 10 percent last year, following a 14 percent contraction during the 2020-2021 period.
On Thursday, an IMF delegation headed by Deputy Division Chief Pablo Morra ended a four-day visit for discussions on the implementation of Barbados’ updated Economic Recovery and Transformation (BERT 2022) plan and reform efforts to build resilience to natural disasters and climate change.
BERT 2000 is being supported by the IMF under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), approved in December last year.
“Barbados faced challenging conditions in recent years due to the global pandemic, natural disasters, and rising global food and fuel prices. After contracting by 14 percent in 2020-2021, economic activity is recovering strongly, driven by the tourism sector, with real (gross domestic product) GDP growth estimated at 10 percent in 2022. The economic recovery is expected to continue in 2023.”
Morra said that the local authorities continue progressing in implementing their ambitious and comprehensive economic reform program.
He said targets for end-December under the IMF’s EFF were met and that international reserves stood at US$1.4 billion at the end of 2022, equivalent to about seven months of imports.
He said the financial performance was strong in the first three quarters of the fiscal year 2022/23, which bodes well for meeting the two percent of GDP primary balance target for the full fiscal year and that preparation of a budget for the fiscal year 2023/24 is well underway.
“Several steps have been taken to advance the structural reform agenda, including strengthening and modernizing procedures for granting and managing duty and tax exemptions and safeguarding the sustainability of the National Insurance Fund.
“Work is also underway on reforms to enhance the sustainability of the public sector pension scheme, strengthen tax administration, and implement reform measures to build resilience to climate change under the RSF,” Morra added.
Morra said discussions for the first review under the EFF and the RSF would occur in May.
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