BARBADOS | GDP Grows by 1.4%, IMF Targets Met, recovery strong despite COVID-19 shock

Washington, DC - February 11, 2022: The  International Monetary Fund (IMF)says the Barbados economy is expected to make a gradual economic recovery over the medium term, but risks to the outlook remain high.

In a statement today, the IMF team led by Bert Van Selm which conducted a staff visit via videoconferencing from February 7-11, 2022, said  the “The ongoing COVID-19 pandemic continues to pose economic challenges to Barbados. Tourism has rebounded in recent months, leading to real GDP growth of 1.4 percent for 2021, and 11½ percent in Q4 2021 (over the same quarter in 2020).

The statement by Bert Van Selm noted that “In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection. All indicative targets for end-December under the EFF were met."

Van Selm continued: "International reserves, which reached a low of US$220 million at end-May 2018, increased to US$1.5 billion at the end of 2021. Barbados recorded a small (½ percent of GDP) primary surplus over the first three quarters of FY2021/22, which bodes well for meeting the primary balance target (minus 1 percent of GDP) for the full fiscal year. Preparation of a budget for FY2022/23 is well underway."

 He added that “Strong steps have been made in implementing structural reforms. The Fair Credit Reporting Act, adopted by parliament in December, will support financial sector development. The Minister of Finance issued regulations for a procedural fiscal rule in December—a key milestone towards enhancing fiscal sustainability."

the IMF pointed out that "the Barbados Customs and Excise Department took important steps to improve performance management, risk management, and trade facilitation during 2021. Work has been initiated on reforms to enhance the sustainability of the public sector pension scheme.

“The team is looking forward to conducting discussions for the seventh review under the EFF in May and would like to thank the authorities and the technical team for their openness and candid discussions,” the IMF concluded.