3 days Ago By Shanna Moore
B arbados has secured a fresh injection of US$56 million ($112 million) from the International Monetary Fund (IMF) after exceeding expectations in its fourth programme review, signalling strong economic growth and impressive strides in climate resilience initiatives. The funds come as the country continues to impress international partners with its homegrown economic recovery and transformation plan, BERT 2022, and its climate policy agenda. The IMF Executive Board review also underscored that the country’s economic growth remained “robust” in 2024, further meeting all structural benchmarks under the programmes.
The new disbursement includes US$19 million ($38 million) under the IMF’s Extended Fund Facility (EFF) and US$37 million ($74 million) under the Resilience and Sustainability Facility (RSF), bringing the combined total payout to some US$242 million. This financial injection further supports the government’s economic recovery and climate resilience efforts. In its review, the IMF praised the progress of the BERT 2022 and what it described as the island’s ambitious climate policy agenda.
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It further highlighted that unemployment fell to its lowest level since 2008 in the first half of the year, while inflation moderated due to easing global commodity prices and lower domestic service costs. The IMF also noted the strength of Barbados’ external position, with the current account deficit narrowing to 5 per cent of GDP during the first nine months of the year and international reserves reaching US$1.6 billion, providing over seven months of import cover.
Despite these positive developments, the IMF acknowledged ongoing vulnerabilities. “While the outlook is positive, Barbados remains vulnerable to global shocks, climate change, and natural disasters, as demonstrated by Hurricane Beryl,” Li noted, highlighting the damage it caused to the fishing sector and coastal infrastructure. The statement, however, noted that the macroeconomic impact was moderate due to the timing of the hurricane during the off-peak tourist season.
Barbados met all quantitative performance criteria, indicative targets, and structural benchmarks for the fourth review under the EFF. The release shared that the government comfortably exceeded its primary fiscal surplus target for the first half of the 2024/25 financial year and is on course to meet its year-end goal of 3.8 per cent of revised GDP.
It further stated that public debt declined to approximately 105 per cent of GDP by the end of September 2024 and that authorities remain committed to achieving a debt-to-GDP ratio of 60 per cent by 2035. Li also noted that critical progress is being made on fiscal reforms, including strengthening revenue administration, improving public financial management, and enhancing public investment and procurement. “These measures are critical to preserve fiscal sustainability and create space for public investment,” he stated.
“Efforts are also ongoing to achieve more inclusive and sustainable growth, with a focus on strengthening the business environment, mobilising domestic savings, and investing in skills and education.” Li highlighted the importance of the exchange rate peg, describing it as “a key anchor for macroeconomic stability”. Following the country’s removal from the Financial Action Task Force (FATF) grey list, he urged the government to maintain momentum to strengthen its anti-money laundering and counter-financing of terrorism (AML/CFT) framework.
Hailing strides made by the government on its climate policy agenda, Li acknowledged the new Electricity Supply Bill which was tabled to promote competition in the electricity market and encourage renewable energy investments. He also noted that the Central Bank of Barbados has adopted a strategy to monitor and assess climate change risks, safeguarding financial stability and resilience. The IMF top official further praised the government’s innovative debt-for-climate swap, which will generate savings for investments in water supply resilience, environmental sustainability, and food security, with Li commending the island’s efforts to mobilise international climate financing.
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