The ex­ec­u­tive board of the In­ter­na­tion­al Mon­e­tary Fund (IMF) Fri­day said it had con­clud­ed the fifth and fi­nal re­views of the Ex­tend­ed Fund Fa­cil­i­ty (EFF) and the Re­silience and Sus­tain­abil­i­ty Fa­cil­i­ty (RSF) arrange­ments with Bar­ba­dos.

The Wash­ing­ton-based fi­nan­cial in­sti­tu­tion said that as a re­sult of the com­ple­tion of the re­views, Bar­ba­dos will be al­lowed to draw down the US$19 mil­lion un­der the EFF arrange­ment and US$39 mil­lion un­der the RSF arrange­ment.

It said this brings the to­tal dis­burse­ments un­der the EFF arrange­ment to US$116 mil­lion and US$193 mil­lion) un­der the RSF arrange­ment.

Ac­cord­ing to the IMF, eco­nom­ic ac­tiv­i­ty in 2024 re­mained ro­bust, with growth es­ti­mat­ed at four per cent, dri­ven by tourism, con­struc­tion, and busi­ness ser­vices. In­fla­tion mod­er­at­ed to an av­er­age of 1.4 per cent due to eas­ing glob­al com­mod­i­ty prices and prices of do­mes­tic goods and ser­vices.

The IMF said that the ex­ter­nal po­si­tion strength­ened fur­ther, with the cur­rent ac­count deficit nar­row­ing to 4.5 per cent of gross do­mes­tic prod­uct (GDP), sup­port­ed by tourism re­ceipts, de­clin­ing im­port prices, and one-off cur­rent trans­fers.

It said gross in­ter­na­tion­al re­serves reached US$1.6 bil­lion at end-2024, equiv­a­lent to over sev­en months of im­port cov­er, pro­vid­ing con­tin­ued strong sup­port to the ex­change rate peg.

Ac­cord­ing to the fi­nan­cial in­sti­tu­tion’s Bar­ba­dos’ near-term out­look is sta­ble and that growth is ex­pect­ed to reach 2.7 per cent in 2025, sup­port­ed by con­struc­tion of tourism-re­lat­ed projects and gov­ern­ment in­vest­ment.

It said in­fla­tion is ex­pect­ed to pick up in 2025 due to the ris­ing cost of non-fu­el im­ports and some do­mes­tic agri­cul­tur­al prod­ucts.

“Nev­er­the­less, risks to the out­look are tilt­ed to the down­side, amidst the high­ly un­cer­tain ex­ter­nal eco­nom­ic en­vi­ron­ment and Bar­ba­dos’ con­tin­ued vul­ner­a­bil­i­ty to glob­al shocks and nat­ur­al dis­as­ters,” the IMF warned.

It said pro­gramme per­for­mance has re­mained strong. All quan­ti­ta­tive per­for­mance cri­te­ria and in­dica­tive tar­gets were met. The au­thor­i­ties ex­ceed­ed the pri­ma­ry fis­cal sur­plus tar­get for in fi­nan­cial year 2024/25 and are tar­get­ing 4.4 per cent of GDP for fi­nan­cial year 2025/26.

Pub­lic debt has fall­en be­low 105 per cent of GDP, and the au­thor­i­ties re­main com­mit­ted to bring­ing it down to 60 per cent of GDP by fi­nan­cial year 2035/36.

The IMF said Bar­ba­dos met the EFF struc­tur­al bench­marks for the re­view, in­clud­ing com­plet­ing the as­sess­ment of hu­man re­source needs at the Bar­ba­dos Cus­toms and Ex­cise De­part­ment, prepar­ing a pub­lic-pri­vate part­ner­ship (PPP) frame­work, and de­vel­op­ing a dai­ly liq­uid­i­ty fore­cast­ing frame­work.

“Both re­form mea­sures for the RSF fifth re­view were al­so im­ple­ment­ed. Key el­e­ments to strength­en the in­te­gra­tion of cli­mate con­cerns in­to pub­lic fi­nan­cial man­age­ment have been com­plet­ed, in­clud­ing the de­vel­op­ment of project ap­praisal guide­lines, the deep­en­ing of fis­cal risk analy­sis, and the prepa­ra­tion of the PPP frame­work. The Cen­tral Bank of Bar­ba­dos has al­so in­clud­ed phys­i­cal cli­mate risk analy­sis in its bank stress test­ing,” it added.

IMF deputy man­ag­ing di­rec­tor, Bo Li, said the im­ple­men­ta­tion of Bar­ba­dos’ home­grown Eco­nom­ic Re­cov­ery and Trans­for­ma­tion pro­gramme has re­mained strong, sup­port­ed by the EFF and the RSF arrange­ments. ‘

Li said the com­ple­tion of the fifth and fi­nal re­views marks the suc­cess­ful con­clu­sion of the Fund arrange­ments.

“While the out­look is sta­ble, risks re­main tilt­ed to the down­side, giv­en the high­ly un­cer­tain ex­ter­nal eco­nom­ic en­vi­ron­ment and Bar­ba­dos’ vul­ner­a­bil­i­ty to shocks and nat­ur­al dis­as­ters. The au­thor­i­ties re­main strong­ly com­mit­ted to en­sur­ing macro­eco­nom­ic sta­bil­i­ty and im­ple­ment­ing struc­tur­al re­forms to boost po­ten­tial growth and build re­silience.”

Li said main­tain­ing strong fis­cal sur­plus­es will be nec­es­sary to achieve the pub­lic debt tar­get of 60 per cent of GDP by the fi­nan­cial year 2035/36.

“The au­thor­i­ties’ fo­cus on strength­en­ing rev­enue mo­bi­liza­tion and im­prov­ing pub­lic fi­nan­cial man­age­ment is ap­pro­pri­ate. These mea­sures will be key to pre­serv­ing fis­cal sus­tain­abil­i­ty and cre­at­ing space for pub­lic in­vest­ment. Fi­nal­iz­ing am­bi­tious re­forms of state-owned en­ter­pris­es is a pri­or­i­ty. The au­thor­i­ties are tak­ing the nec­es­sary steps to mo­bi­lize ex­ter­nal fi­nanc­ing.”

Li said that the ex­change rate peg re­mains a crit­i­cal an­chor for macro­eco­nom­ic sta­bil­i­ty, sup­port­ed by am­ple in­ter­na­tion­al re­serves.

“Mea­sures have been tak­en to strength­en the mon­e­tary pol­i­cy frame­work and fi­nan­cial safe­ty nets. Ef­forts to en­hance the lo­cal pay­ments mar­ket and in­fra­struc­ture are ad­vanc­ing, with the goal of mov­ing to a dig­i­tal pay­ments sys­tem in 2026.

“Re­forms to im­prove the busi­ness en­vi­ron­ment and boost growth po­ten­tial are key. Im­por­tant mea­sures in­clude ad­vanc­ing the dig­i­tal­iza­tion of gov­ern­ment ser­vices and in­vest­ing in skills and ed­u­ca­tion. The au­thor­i­ties fo­cus on boost­ing macro­eco­nom­ic re­silience to nat­ur­al dis­as­ters and fa­cil­i­tat­ing the tran­si­tion to re­new­able en­er­gy is wel­come,” Li added.