IMF Pleased With Barbados’ Economic Recovery Plan Progress

Head of the IMF team that visited the island this month, Bert van Selm, said Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme.

BRIDGETOWN, Barbados, Wednesday February 13, 2019 – The International Monetary Fund (IMF) has praised government for its execution so far of the Barbados Economic Recovery and Transformation (BERT) plan, which is funded by a US$290 million Extended Fund Facility (EFF) from the Washington-based financial institution.

An IMF mission said in a statement issued yesterday that the Mia Mottley-led administration had met all indicative targets up to the end of last year.

“Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme,” Bert van Selm, head of the team that visited February 5 to 8, said as the IMF pointed out that targets for foreign exchange reserves, domestic assets and the primary surplus of income needed to pay back its debt, were all met by a wide margin.

“Good progress has been made in implementing end-December 2018 structural benchmarks under the EFF. Two key pieces of legislation – the Public Financial Management Act, and the Town and Country Planning Act – were adopted in early 2019. Preparation of the budget for FY2019/20 targeting a primary surplus of six per cent of GDP is well under way. Full year effects of reforms set in motion during the current (2018/19) fiscal year, including the introduction of several new taxes and ongoing streamlining of public sector work force at state-owned enterprises, should help achieve this target.”

The IMF added that a detailed assessment of the budget will be made when it is finalized.

It also suggested that government is well on the way to striking a deal with international creditors, following its decision to default on those payments last June.

“Progress being made by the authorities in furthering good-faith discussions with external creditors is welcome. Continuing open dialogue and sharing of information will remain important in concluding an orderly debt restructuring process,” the IMF statement said.

The team will return in May to conduct the discussions for the first review under the EFF which was approved last October.

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