Prime Minister Mia Amor Mottley chatting with IMF Mission Chief, Michael Perks, following a press conference at Ilaro Court on Thursday. Looking on is Central Bank Governor, Dr. Kevin Greenidge. (C. Pitt/BGIS)
The International Monetary Fund (IMF) and Barbados have reached a staff-level agreement on the completion of the fifth and final reviews of the Extended Fund Facility (EFF) and the Resilience and Sustainability Fund (RSF) arrangements.
This disclosure came from IMF Mission Chief, Michael Perks, who said the reviews were expected to go before the IMF’s Executive Board for approval in June, and once completed, this would allow local authorities to draw the remaining US$19 million under the EFF arrangement, and about US$38 million under the RSF.
And, Prime Minister Mia Amor Mottley said Barbadians should feel proud that in spite of everything else that happened, the island stands taller, stronger, and more confident than seven years ago when it entered the first IMF programme in 2018.
Ms. Mottley and Mr. Perks made the comments on Thursday afternoon during a press conference, at Ilaro Court. the IMF team, led by its Mission Chief, visited Barbados from May 2 to 8, to discuss the implementation of the Barbados Economic Recovery and Transformation (BERT 2022) Plan.
In discussing the way forward, the Prime Minister said that even though Barbados was stronger now, Government was aware that because of what is happening globally, outside “is seriously overcast”.
“As we bring this process to an end, we have determined that we will keep our relationship open with the Fund. We will discuss with the Social Partnership what that relationship should be.
“It is at this stage likely to be what I call speed dial standby, what they call precautionary standby, which simply means that if at some point in the next three months or six months or nine months, the overcast conditions change into showers or floods or high winds, that instead of having to go through a lengthy process to get help, you literally press speed dial, one button, and everything is there,” she explained.
Barbados, she pointed out, has more than seven months of foreign reserves, up from the three weeks of import cover when Government started the journey with the IMF in 2018. Therefore, added, she no longer worries about the island’s foreign reserves.
“I go to sleep worrying about skills, and I go to sleep worrying about who is going to be able to come to work to do the jobs that we need doing; not just because of population decline alone, but because the complexity of government requires a range of different skills, all of which are not necessarily available in small states. That’s why the IMF and other countries have set up CARTAC, and CARTAC, for many years, has been offering very technical skills to countries in the region….
“One of the benefits of…a precautionary standby arrangement is that it still allows us to retain access to technical assistance, structured policy dialogue, and if necessary, …emergency resources. The disadvantage of it is that you have to pay it back in a shorter period of time if we actually have to draw down money for financing purposes,” Ms. Mottley explained.
In highlighting the achievements under the home-grown BERT 2 Plan, Mr. Perks pointed out that the external position had improved, with a significant strengthening of the current account in 2024.
He continued: “The Barbadian economy continues to perform well. Growth was very strong in 2024, and the momentum has carried over into 2025. Looking ahead, the economy is projected to grow by 2.7 per cent in 2025…. The economic outlook is subject to significant downside risks given the highly uncertain external economic conditions and Barbados’ vulnerability to global shocks and to natural disasters….
“Structural reforms have been implemented to boost fiscal sustainability, enhance growth and competitiveness and build resilience. The authorities are on track to complete all five reviews on time. They have met all the EFF quantitative targets at every review. They’ve completed all 21 structural benchmarks with only a few subject to short delays. And…they have met…10 RSF reform measures…. This is no small feat.”
Mr. Perks noted that on the structural front and in these uncertain times, Government was “rightly looking” to accelerate their ongoing reforms to deliver more inclusive, sustainable, and resilient growth. He added that the IMF was looking forward to continuing to provide support to Barbados.
Author: Sharon Austin
Source: https://gisbarbados.gov.bb/blog/prime-minister-barbados-will-keep-relationship-with-imf-open/
