December 20, 2024
Barbados has secured a fresh injection of US$56 million (BDS$112 million) from the International Monetary Fund (IMF) after surpassing expectations in its fourth programme review, signaling 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 highlighted that the country’s economic growth remained “robust” in 2024, meeting all structural benchmarks under the programmes.
The new disbursement includes US$19 million (BDS$38 million) under the IMF’s Extended Fund Facility (EFF) and US$37 million (BDS$74 million) under the Resilience and Sustainability Facility (RSF), bringing the combined total payout to approximately 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 BERT 2022 and the island’s ambitious climate policy agenda. “The implementation of Barbados’ homegrown Economic Recovery and Transformation (BERT) programme and its ambitious climate policy agenda remains strong, supported by the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangement,” said IMF Deputy Managing Director and Acting Chair, Bo Li, in a statement.
The release highlighted the expansion of the country’s economy by 3.9% between January and September 2024, driven by growth in tourism, business services, and construction. It also noted 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 acknowledged the strength of Barbados’ external position, with the current account deficit narrowing to 5% 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 recognized 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. However, 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% of revised GDP. Public debt declined to approximately 105% of GDP by the end of September 2024, and authorities remain committed to achieving a debt-to-GDP ratio of 60% by 2035.
The IMF 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, commending the island’s efforts to mobilize international climate financing.
Source: (Barbados Today)
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