Barbados has apparently sailed through the latest test set by the International Monetary Fund (IMF) in the four-year-old structural adjustment programme between the Washington-based international financial institution and the Mia Mottley administration.
According to preliminary findings of a staff team that ended a four-day visit here on Thursday, the IMF endorsed the economy’s continued strong recovery in 2023, with growth estimated at 4.4 per cent, driven by tourism and related sectors.
The government was applauded for continuing to make “strong progress” in implementing its “ambitious” economic reform programme.
Led by IMF economist Michael Perks, the review of recent economic developments and reform efforts laid the groundwork for the third review in May of the Extended Fund Facility (EFF) / Resilience and Sustainability Facility (RSF) programmes.
“Real GDP expanded by an estimated 4.4 per cent, reaching its pre-pandemic level,” the IMF officials said. “Annual inflation remained broadly stable, despite easing international food prices, on account of adverse weather conditions reducing the supply of certain crops and higher prices of dining and other goods and services.”
The multilateral financial institution also found that the island’s current account deficit is estimated to have narrowed to 8 per cent of Gross Domestic Product (GDP) from 10.7 per cent in 2022.
The IMF team declared that the implementation of the Barbados Economic Recovery and Transformation (BERT 2022) programme remains strong, supported by the EFF and RSF.
Programme targets under the BERT for the end of December last year were met and structural benchmarks implemented, the IMF mission stated, adding that international reserves rose to $3 billion (US$1.5 billion) or 7.3 months of imports.
“Strong fiscal performance through the first three quarters of FY 2023/24 bodes well for meeting the 3.4 per cent of GDP primary balance target for the full fiscal year,” the IMF staff assessors forecast.
“Important steps are being taken to advance the structural reform agenda. End-December structural benchmarks aimed at the reform of state-owned enterprises have been implemented.”
Barbados was also praised for starting work on reforms to strengthen tax administration, public financial management and the business environment, while also building resilience to climate change under the RSF.
The country was also praised for making significant progress in strengthening its Anti Money Laundering/Combating the Financing of Terrorism framework that has enabled it to exit the Financial Action Task Force grey list.
The team said it is looking forward to conducting discussions for the third review under the EFF and RSF in May, and thanked the government and its technical team for their hospitality, openness and candid discussions.
(EJ)
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