Barbados: 2021 Article IV Consultation, Sixth Review Under the Extended Arrangement Under the Extended Facility, and Request for Modification of Performance Criteria-Press Release; and Staff Report

December 17, 2021

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Barbados: 2021 Article IV Consultation, Sixth Review Under the Extended Arrangement Under the Extended Facility, and Request for Modification of Performance Criteria-Press Release; and Staff Report, (USA: International Monetary Fund, 2021) accessed December 21, 2024

Summary

While Barbados has been making good progress in implementing its Economic Recovery and Transformation (BERT) plan to restore fiscal and debt sustainability, rebuild reserves, and increase growth, it continues to face major challenges owing to the global pandemic. International reserves have increased to US$1.4 billion by October 2021 supported by IFI loans. This, and a successful 2018-19 public debt restructuring, have helped rebuild confidence in the country’s macroeconomic framework. However, a virtual standstill in the tourism sector during the pandemic took a significant toll in 2020, with the economy contracting by 18 percent. While Barbados was successful in containing the outbreak during 2020, renewed COVID-19 waves weighed on the economic recovery in 2021. In addition, Barbados was hit by the twin natural disaster shocks of volcanic ashfalls from neighboring St. Vincent in April and category 1 hurricane Elsa in July. Economic growth is projected at 1.6 percent for 2021 premised on a modest recovery of tourism towards the end of 2021—down from 3 percent projected at the time of the fifth EFF review. The outlook remains highly uncertain, and risks are elevated.

Subject: COVID-19, Credit, Environment, Fiscal policy, Fiscal stance, Health, International organization, Monetary policy, Money, Natural disasters, Public debt

Keywords: Caribbean, Cost reduction, COVID-19, Credit, Economic reform program, Financial asset, Fiscal stance, Global, IMF EFF loan, Natural disasters, SOE debt

Publication Details

Pages:

124
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2021/268
Stock No:

1BRBEA2021002
ISBN:

9781616356583
ISSN:

1934-7685

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