BRIDGETOWN, Barbados, Wednesday November 7, 2018 – On the heels of a US$290 million Extended Fund Facility (EFF) from the International Monetary Fund (IMF), Barbados has been granted a US$100 million loan from the Inter-American Development Bank (IDB).
The financial institution said the loan—the structure and content of which are aligned to the recently approved EFF—will help the country regain macroeconomic stability, implement fiscal adjustment measures that foster a sustainable fiscal balance in the short and medium term, and protect social spending programs for the most vulnerable Barbadians.
The IDB said the loan is funded from its Ordinary Capital and will be disbursed in a single tranche within a year. The executing agency will be Barbados Ministry of Finance, Economic Affairs and Investment.
The Government has been seeking financial and technical assistance from the IDB and the IMF to help formulate a comprehensive economic reform programme to stabilize public finances after years of increasing debt and to address the country’s macroeconomic and fiscal crisis.
“This financing, in conjunction with corrective economic and fiscal measures introduced by the government,” the IDB said yesterday, “aims to give short-term relief and allow the government to advance on important and difficult reforms to place the public finances on sustainable footing.”
“This support is part of a broader effort to stabilize the Barbadian economy in coordination with the IMF and the Caribbean Development Bank (CDB) during the four-year programme.”
The key elements of the programme include: fiscal reforms to address structural weaknesses in the nation’s fiscal framework; restructuring and privatization of state-owned enterprises; protecting vulnerable groups by strengthening the nation’s safety nets; reform of the Central Bank of Barbados to grant it with more autonomy and limit financing to the government; debt restructuring; and the liberalization of labour, product and service markets to promote growth.