Barbados has secured an additional US$56 million (BDS$112 million) from the International Monetary Fund (IMF) following a successful fourth programme review. This development underscores the nation’s impressive economic performance and strides in climate resilience under its homegrown economic recovery plan, BERT 2022.
The new disbursement comprises US$19 million (BDS$38 million) under the IMF’s Extended Fund Facility (EFF) and US$37 million (BDS$74 million) through the Resilience and Sustainability Facility (RSF). This brings Barbados’ total IMF funding to US$242 million, further advancing its economic transformation and climate initiatives.
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In its review, the IMF highlighted that Barbados’ economy expanded by 3.9% between January and September 2024, driven by growth in tourism, business services, and construction. Unemployment fell to its lowest level since 2008 during the first half of the year, while inflation eased due to declining global commodity prices and reduced domestic service costs.
Barbados’ external position also showed strength, with international reserves reaching US$1.6 billion—equivalent to more than seven months of import cover—and the current account deficit narrowing to 5% of GDP during the year’s first nine months.
Despite these achievements, the IMF flagged vulnerabilities tied to global shocks, climate change, and natural disasters, citing Hurricane Beryl’s recent impact on the island’s fishing sector and coastal infrastructure. However, the macroeconomic effect was moderate, given the storm’s timing during the off-peak tourism season.
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The government exceeded its primary fiscal surplus target for the first half of the 2024/25 financial year, with public debt falling to approximately 105% of GDP by September 2024. Barbados remains on track to meet its year-end fiscal goal and is committed to reducing its debt-to-GDP ratio to 60% by 2035.
The IMF praised ongoing fiscal reforms, including improved revenue administration, public financial management, and public investment practices. It also commended the government’s business environment enhancements and focus on inclusive growth through investments in education, skills, and domestic savings mobilisation.
On the climate front, the IMF lauded Barbados’ innovative policies, such as its debt-for-climate swap, which reallocates savings towards water supply resilience, food security, and environmental sustainability. Additional praise was given for the new Electricity Supply Bill aimed at fostering renewable energy investment and the Central Bank of Barbados’ adoption of a strategy to monitor climate-related risks.
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The IMF encouraged continued momentum in anti-money laundering and counter-terrorism financing reforms, which helped Barbados exit the FATF grey list. The exchange rate peg was also recognised as a cornerstone of macroeconomic stability.
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