Durrant Pate/Contributor

Barbados has secured a fresh injection of US$56 million (BD$112 million) from the International Monetary Fund (IMF), as the Caribbean country continues to impress international partners with its homegrown economic recovery and transformation plan.

This has come about as Barbados has exceeded expectations in its fourth programme review with the IMF under its economic reform programme agreed with the multinational funding agency. Barbados has been exhibiting strong economic growth and impressive strides in climate resilience initiatives.

In its latest review, the IMF Executive Board underscored that the country’s economic growth remained “robust” in 2024, further meeting all structural benchmarks under the Barbados Economic Recovery and Transformation (BERT) Plan of 2022, scheduled to end in 2027.

Details of US$56 million draw-down

The new disbursement includes US$19 million (BD$38 million) under the IMF’s Extended Fund Facility (EFF) and US$37 million (BD$74 million) under the Resilience and Sustainability Facility (RSF), bringing the combined total payout to some 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 the BERT 2022 and what it described as the island’s ambitious climate policy agenda.

IMF Deputy Managing Director and Acting Chair, Bo Li, in a statement on its latest review highlighted the expansion of the country’s economy by 3.9 per cent between January and September 2024, driven by growth in tourism, business services, and construction as well as unemployment falling to its lowest level since 2008 in the first half of the year. At the same time, inflation moderated due to easing global commodity prices and lower domestic service costs.

Li noted the strength of Barbados’ external position with the current account deficit narrowing to 5 per cent 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.

Ongoing vulnerabilities

Despite these positive developments, the IMF executive admitted to ongoing vulnerabilities adding, “While the outlook is positive, Barbados remains vulnerable to global shocks, climate change, and natural disasters, as demonstrated by Hurricane Beryl.” 

He detailed the damage it caused to the fishing sector and coastal infrastructure by Beryl emphasizing that 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.

Following the country’s removal from the Financial Action Task Force (FATF) grey list, Li urged the government to maintain momentum to strengthen its anti-money laundering and counter-financing of terrorism (AML/CFT) framework. 

Hailing strides made by the government on its climate policy agenda, the IMF official acknowledged the new Electricity Supply Bill, which was tabled to promote competition in the electricity market and encourage renewable energy investments.