Barbados and IMF reach staff level agreement: CARICOM BUSINESS
The IMF and Barbados have reached a staff-level agreement on the completion of the fifth review under the EFF arrangement, which was conducted virtually between May 3-7, 2021.
According to the IMF, the economy remains severely depressed by the ongoing global pandemic with tourism operating at a fraction of normal levels. Economic growth for 2021 is premised on a modest recovery of tourism in the second half of 2021.
The Fund however hailed the new Central Bank law adopted in December 2020, which it deems a critical safeguard for continued prudent macroeconomic policy. International reserves now stand at US$1.3 billion and all quantitative targets for end-March under the EFF were met, except for the performance criterion on central government transfers and grants to public institutions.
The Government of Barbados is targeting a primary balance of 0% of GDP for FY2021/22 (compared to a deficit of 1% of GDP in FY2020/21. The long-term debt target of 60% of GDP will be extended by two years (from FY2033/34 to FY 2035/36) to reflect the impact of the pandemic on the economy. (IMF)
Extract from the CARICOM BUSINESS Newsletter Vol 4 No 18
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