IMF Reports Barbados Economy “Continues Recovery”

The following report was posted by the IMF to its website (29.6.2017). In summary recovery of the economy continues on the back of tourism BUT the fiscal deficit remains a problem AND declining foreign reserves. Not sure if ”recovery” is the correct word for the IMF to use in the report. The other point to note from the report is that the IMF has offered to support Barbados. The question is how will government respond with a general election on the horizon.

It will be of great interest to observe how the economy of Barbados responds to the last wave of taxes imposed in the last budget costed at about BBD540 million.

June 29, 2017

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board.

  • The Barbadian economy continues its recovery on the back of stronger tourism performance but improving public finances remains a critical challenge.

  • Economic growth in 2016 is estimated to have been 1.6 percent and to have accelerated in the first quarter of 2017 to 2 percent.

  • The IMF stands ready to assist the government of Barbados through continued policy dialogue and technical assistance.

At the invitation of the authorities, an International Monetary Fund (IMF) team led by Judith Gold visited Barbados from June 20–29 to review recent economic developments and discuss the 2017 budget. At the end of the visit, Ms. Gold issued the following statement:

“The Barbadian economy continues its recovery on the back of stronger tourism performance, but improving public finances remains a critical challenge. Economic growth in 2016 is estimated to have been 1.6 percent and to have accelerated in the first quarter of 2017 to 2 percent. The stronger economic performance has supported a reduction in the unemployment rate to 9.7 percent in 2016 from 11.3 percent in 2015. Inflation started to pick up in the second half of 2016 after deflation in 2015, and on a point-to-point basis reached 3.2 percent by end-December 2016 mainly due to higher food prices.

“The current account has further narrowed by 2 percentage points to 4.5 percent of GDP on the back of improved tourism receipts, a robust increase in exports, and low oil prices. Notwithstanding this improvement, international reserves fell to B$682 million by end-2016, about 2 months of imports. Delayed official loan disbursements and privatization, as well as lower private-sector inflows, were key drivers of this decline. Net International reserves remain relatively low.

“There was some progress in reducing the fiscal deficit in FY2016/17, which is estimated to have declined to 5.5 percent of GDP from 6.8 percent in FY2015/16. The majority of the adjustment was generated by lower government spending, while fiscal revenues held steady. Despite this progress, the large government financing requirements were a challenge, as banks reduced their sovereign exposure. As a result, the government had to increasingly resort to funding from the Central Bank of Barbados (CBB).

“Growth in 2017 is projected to slow to less than 1 percent, reflecting the fiscal consolidation efforts introduced in the FY2017/18 Budget. Inflation is expected to continue to accelerate to 6.7 percent by year end because of the increase in the National Social Responsibility Levy (NSRL) and other taxes and fees, but revert to more historical norm in 2018 and subsequent years. There are important downside risks related to the increase in domestic and global uncertainty, including the impact of the Brexit on the British pound.

“Continued fiscal discipline, with economic growth, are essential to securing Barbados’ future. They will be critical to bolster international reserves and support the currency peg. Only a substantial and a sustained reduction in the fiscal deficit, which will put the debt-to-GDP ratio on a solid downward path, will restore the country’s credit rating and attractiveness to investors.

“The May 30th budget accelerates the pace of adjustment. It seeks to address the fundamental imbalance between revenues and expenditures that has characterized Barbados’ public finances in the past decade, and to significantly reduce new funding requirements. The budget is primarily focused on raising revenues while shoring up international reserves, including through an increase in the NSRL—which mostly impacts imported goods—from 2 percent to 10 percent. The government also plans cuts in current expenditure, to complete ongoing privatization efforts, and to undertake new divestments. In addition, the government seeks to initiate a voluntary exchange of debt instruments with the National Insurance Scheme and the CBB to reduce the interest bill. If implemented as envisaged, the 2017 budget would lead to substantial gains toward improving public finances.

“Over the medium-term, further fiscal adjustment would be needed on the expenditure side to decisively reduce debt and debt service costs. Transfers to public enterprises of close to 8 percent on an annual basis represent the second largest expenditure item, after the wage bill, and about the same magnitude as the interest bill on the public debt. Both expenditure categories weigh heavily on public finances and critical reforms are needed over the to restore sustainability and confidence. Reduction in transfers to public enterprises must be supported by structural reforms to reduce SOEs’ operating costs, rationalize their programs, and raise their revenues. Consideration should also be given to divesting commercial SOEs that can be run more efficiently and profitably by the private sector. Other structural reform, especially those focused on improving the investment climate and fostering growth are also critical.

“The IMF stands ready to assist the Government of Barbados, including through continued policy dialogue and technical assistance. The team would like to thank the authorities, technical staff, representatives of civil society, and the private sector, for their open discussions and constructive dialogue.”

The mission met with Minister of Finance and Economic Affairs Christopher Sinckler, Minister of Industry, International Business, Commerce, and Small Business Development Donville Inniss. Acting Central Bank Governor Cleviston Haynes, the leader of the opposition Mia Mottley, senior government officials, and representatives of the private sector.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Raphael Anspach

Phone: +1 202 623-7100Email: MEDIA@IMF.org

148 comments

  • Vincent Haynes

    …..the end result as expected…….except for operatives.

    Like

  • Vincent Haynes

    Who will guard the guards?

    PwC is back in the spotlight, and once again it is not for anything good
    PwC’s woes highlight the need for auditing change
    Accountants hope artificial intelligence will be able to help them spot fraud
    ft.com
    http://on.ft.com/2scCdQ8

    Like

  • Well Well & Consequences Observing Blogger

    Another shitbomb about explode.

    Like

  • Carson C. Cadogan

    Vincent Haynes July 1, 2017 at 7:53 AM

    Three buffoons on a path to destroy Barbados.

    Like

  • Carson C. Cadogan

    Vincent Haynes July 1, 2017 at 7:56 AM

    Nothing new.

    Every month fuel prices are adjusted. Upwards or downwards. Every Caribbean country with the exception of Trinidad does it.

    Is that all you have to offer?

    Like

  • Carson C. Cadogan

    Vincent Haynes July 1, 2017 at 7:58 AM

    Every poll in the USA had Hilary Clinton winning the US presidency.

    What was the actual result again?

    Let me quote our Prime Minister The Right Hon. Fruendel Stuart:

    “The only poll that matters is polling day”

    Like

  • Carson C Cadogun

    You doing a lot of talking these days. Yuh panties showing. And they have a big hole in dem.

    Like

  • Carson C. Cadogan

    Pachamama July 1, 2017 at 9:16 AM

    The TRUTH must be told, cant let you all get away with your lies.

    Like

  • Lol the blp operatives busy at working looking for bad news. Cuh dear.

    Like

  • Carson C. Cadogan

    They don’t like we

    The wicked don’t like we

    That is why they criticize we

    They fight we from all angles,

    They back bite we

    But we are not afraid of evil doers

    They no power

    God bless we with Health and Strength

    Like

  • Like

  • The IMF team visited Barbados last week and was able to give a comprehensive analysis on Barbados. Am I to believe that this script was penned and delivered to them. The team said that ” we will continue policy dialogue and technical assistance”

    Like

  • Carson C. Cadogan

    The Hon. Christopher Sinckler , Min. of Finance:

    Like

  • Carson C. Cadogan

    Tell me Why July 1, 2017 at 10:53 AM

    You are dumb enough to believe anything.

    Like

  • Carson and Angela. Would you bite the hand that feed you? Who provide the unemployment figures? Many individuals were dismissed from the private sector. Are those individuals factored within the figures?

    Like

  • Dumbert Carson.
    Read the second last paragraph and you will also believe.

    Like

  • “A FLOOD WARNING has been issued for Barbados and will initially remain in effect until 6 p.m.”

    Like

  • The blp operatives choose to believe the fake poll that was administered by Cadres but refuse to belive that the IMF findings says barbados is on the right path for recovery.
    To a beat the operatives keep harping about the debt. Yes there is debt but most of it was accumulated in the development of the country .
    Yes and some of it was wasted be that as it may without debt barbados would still be living back in the days of high poverty and donkey carts.
    The development of barbados meant tradeoffs had to be given but in the long term barbadians have done better througout the years than the older generations who toiled and laboured in the sugar cane fields for little or nothing

    Like

  • Cut the long talk.Mobilize the youth,the disaffected taxpayers,the disaffected citizens and the 40 percenters..Time to twitter and march.Bring down these impostors.See how it’s done by the voters in London today…
    https://www.theguardian.com/politics/2017/jul/01/jeremy-corbin-to-speak-at-london-anti-austerity-march

    Like

  • @Hants

    Tis the season. You and the BajanCanadians enjoy your hoiday!!!

    Like

  • Hahaha…..the impossible

    “Continued fiscal discipline, with economic growth, are essential to securing Barbados’ future.

    Both expenditure categories weigh heavily on public finances and critical reforms are needed over the to restore sustainability and confidence. Reduction in transfers to public enterprises must be supported by structural reforms to reduce SOEs’ operating costs, rationalize their programs, and raise their revenues. Consideration should also be given to divesting commercial SOEs that can be run more efficiently and profitably by the private sector. Other structural reform, especially those focused on improving the investment climate and fostering growth are also critical.

    Like

  • millertheanunnaki

    @ angela Skeete July 1, 2017 at 11:30 AM
    “The blp operatives choose to believe the fake poll that was administered by Cadres but refuse to belive that the IMF findings says barbados is on the right path for recovery.
    To a beat the operatives keep harping about the debt. Yes there is debt but most of it was accumulated in the development of the country .
    Yes and some of it was wasted be that as it may without debt barbados would still be living back in the days of high poverty and donkey carts.”

    Angela S(s), the rebranded ac aka the accredited cretin, if there is one thing that makes a liar the consummate bull-shitter is the ability to be consistent in repeating the same lie.
    But you have failed that test of ‘lying’ integrity.

    So here is one last opportunity for you the self-acclaimed innocent liar to redeem yourself in the ‘closeted’ eyes of the BU household.

    Now which debt are you referring to?

    The one accumulated before and under OSA’s administration?

    Or is it the debt that doubled under the current DLP?

    Before you refuse to respond let it be known that you are on record for blaming the debt left by the previous Arthur administration for all the economic ills that beset Barbados today with nothing to show for those 14 years of squandermania other than a few toffee wrappers in the Greenland landfill.

    It seems Barbadians were living in squalour and riding donkeys carts during the years of debt accumulation under OSA but are now so much enjoying the fruits from their ‘interest’ paid that they have remortgaged their country from a debt of around $7 billion to a doubly laden millstone of around $13 billion and sinking.

    Imagine having t o double your repayments with nothing of a capital asset of significance to show for it!

    Not even a reduction in the principal amount still outstanding!

    Only in Looney Stinkliar world of public “fine ants” could such voodoo economics take place.

    Like

  • Now I have arrived at an airtight conclusion that it is the Quisling Darcy Boyce that is the architect of the financial mess we are in.This Quisling was a trusted lieutenant of the OSA inner circle and was even made a deputy governor of the Central Bank until he had to be removed and sent to head the Tourism Investment Unit.Here is my theory.In matters of mathematics,budgeting,economics,forecasting etc neither Stuart nor Sinckler nor the Jester(never mind what he claims to be,he’s just that, a jester, a physical deficit idiot)can rise to the occasion.The Quisling can.The man is well qualified in Economics,Finance and Accounting.Its an Esau/Jacob situation.An unelected man grinding Bajans to dust and foolish men with giant sized egos but no common sense are party to the sham that passes for budgetary proposals designed for failure.The Quisling doing the planning and writing,the buffoon doing the delivery of what is written in Parliament and the Doolittle man pounding the table along with his poor rakey brethren and sisthren in the Lower and Upper House

    Like

  • Carson C. Cadogan

    Hants

    You on holiday in Barbados/

    Like

  • Carson C. Cadogan

    Gabriel

    Nothing that you say make any sense.
    When common sense was being shared out you were absent.

    Like

  • Thanks David.

    It is good to be a Bajan-Canadian.

    Celebrations all across Canada today.

    Temperature 24C in Toronto. Almost as hot as Barbados. Sweeeeet!

    Like

  • Vincent Haynes

    Well,well,well…………how many more to eat crow?…..starting with these pests on here…

    Jepter apologizes
    Government Senator Jepter Ince has apologized “unreservedly” for describing the local business community as parasites who were only bellyaching about the recently announced budgetary measures because they were unwilling to carry…
    barbadostoday.bb
    https://www.barbadostoday.bb/2017/07/01/jepter-apologizes/

    Like

  • Gabriel

    Your post is a good analysis but I do not know if Stinkliar really listens to Boyce anymore ………..maybe to the physical deficit man who seems to be a key player. No wonder we cannot get out of the black hole.

    Remember that Boyce was the guru for the dead king, the man who stabbed OSA in his back……a shock from from OSA probably has never recovered. Remember Boyce was supposed to be the acting minister of finance during Thompson’s illness and no one seem to know until the now PM was forced to come out and say.

    Boyce was said to be the architect of the first budget which threw the Barbados economy in a downward spiral from which it has not recovered with the voodoo economics that Stinkliar is practicing.

    I was at a friend’s house recently and also there was a senior public officer who worked in the finance ministry………the person said they had to get out, they could not take the crap anymore.

    Anyway, have no fear, have faith, Solutions will solve Barbados’ problems in two months!

    Like

  • Carson C. Cadogan

    Prodigal Son, Lorenza, Lorenzo,

    You are rambling more and more as you are going along.
    You will be completely incoherent very soon.

    Like

  • Why is the apology sent from his home address?

    He uttered the offensive remarks at the DLP den of corruption so it should be on the party’s letter head since he seemingly does not want it to be an official public apology recorded on the finance letterhead.

    No wonder he is so confused with physical and fiscal deficits…… such a moron.

    Like

  • Does anyone remember for what purpose was the money from Credit Suisse used for by this government?

    Like

  • Prodigal
    I couldn’t believe my eyes when out of curiosity I opened the Chris Sinckler video posted at 11.01am today.As the MC introduced his eminence the Minister of Grief He Saw,who sold his birthright to the Quisling, Judas Boyce lo and behold who is rising like a man renewed in strength and vigor none other than the just married 84 year old former Dean of the St Michael’s Cathedral,the Mene Mene Tekel Upharsin prophet who foretold the downfall of the Dems in a sermon from the Mount Cathedra,who told Barrh,’you been weighed in the balance and found wanting’,this very same man is now a regular at George Street on Fridays eating a food and singing from the same hymn sheet as Stuart and the Dems choir,this man whom the faithful refer to with reverence as decanus emeritus,Harold Edmund the first Dean to have a Pauline moment and has turned a blind eye to the suffering of the poor,the sick,the hungry and the oppressed now cheers on Saul himself,the devil himself who binds the citizens and weigh on them heavily with terrible taxes Matthew would find great difficulty in collecting.

    Like

  • Gabriel

    Methinks he is suffering from amnesia, dementia…….

    If he thought that Barrow times deserved his condemnation……..(though I was not happy that he used pulpit of the Cathedral to do it) these times more than ever should bear the brunt of his condemnation. Instead he has decided to fold and meekly follow the wicked dems……..in other words, he sold his soul for a senator pick. Does he contribute to the debates on a regular basis?

    People are suffering more than ever despite what the yardfowls say.

    I think he has fallen from grace with most right thinking Anglicans.

    Like

  • Degrading people’s character and cold hearted outrageous assassination attacks effective enough to draw blood are the blp operatives cure for barbados economy
    Say whatever dislike there are for Sinckler he has sufficiently managed the barbados economy to prevent social bedlam. The blp operatives seem to conveniently forget that in addition to the country scarcity of Fx the govt had to find finances to safely secure our nations health against the worldwide virus called Ebola
    Yes folks at a time when the world economies were been devastated and barbados tourism one nest basket could not help because of lack of people actvity out of fear.
    These are the out of control destruction that would have financially contributed to a fragile barbados economy if the govt of the day was unable to put a handle in the prevention of a catastrophic outbreak of the Ebola virus on the island
    Also one can not discount or disregatd the few but passing hurricanes which all played a part in helping to drain a weak and fragile financial basket
    The blp operatives tend to have convienent memories about those aspects and their negative impact on the economy that can revert with an adverse effect on the nations finances as a whole

    Like

  • Some of the same high roollers and yes some who make negative comments about tax measures are some who have accumulated massive credit card debt having lavish lifestyles as if their were hollywood celebrities living and believing a lie purely built out of vodoo economics during the OSA reign.
    Now that the tide has rolled in and these predators of opulence and self inflicted grandeur has to pay the piper they cry belly ache and blames govt for all their self inflicted wounds.
    Glad so glad Sinckler told most of them to get the hell out of the country way and it is not about their wants and needs but better yet first and foremost it is all about country interest
    Wuhlosss what a bunch of cold hearted vertebrae.These snakes deserve every tax measure called for maybe next time they would stick a toe in the water to test the temperature before sticking both feet in
    What is even worst nothing these crooked and bent out of shape do or say helps neither themselves or the country
    What a bunch of losers

    Like

  • Carson C. Cadogan

    Green Monkey

    You might just learn something. But I doubt that this information will penetrate your bone head.

    “Wastewater system weathers heavy rains”

    http://www.nationnews.com/nationnews/news/98245/wastewater-weathers-heavy-rains

    Like

  • I must admit that I am not knowledgeable about the fuel distribution business or about the details of the sale of the BNTCL to SOL. That said, I am under the impression that the Government was looking forward to the sale of the BNTCL as a inflow of foreign exchange and assistance to the financial position of the Government. Now that the FTC has rejected the bid for the sale of BNTCL, does this mean that I can expect even more taxes and restrictions on access to foreign exchange?

    Also I note that in anticipation of the sale of BNTCL to SOL, Rubis had applied to the Town Planning department for permission to refurbish its petroleum product storage facilities located on Spring Garden. This seems to me to be evidence that but for regulatory restrictions BNTCL does not possess any unique capability on the importation and storage of petroleum products. Rubis seems to already have the means to import, store and distribute petroleum products. Does this imply that the value of the BNTCL is significantly reduced given the FTC’s rejection of a moratorium on the construction of new terminal facilities or new import depots?

    I await the BU experts’ comments on the wider implications of the FTC rejection of SOL’s bid for the purchase of the BNTCL.

    Like

  • “In the last nine years, Barbadians have paid more taxes than in any similar period. Since 2008, $22.3 billion have been given to a greedy Treasury, which has not only spent it all, but another six billion dollars to boot, creating a massive deficit. By contrast, in the previous nine years, between the financial years 1999/2000 to 2007/2008, when the tax take peaked, Government took in $17.4 billion, and spent $18.8 billion.” I thought the “time of plenty” was under Arthur? All the misleading talking points getting exposed.

    Like

  • Vincent Haynes

    “In the last nine years, Barbadians have paid more taxes than in any similar period. Since 2008, $22.3 billion have been given to a greedy Treasury, which has not only spent it all, but another six billion dollars to boot, creating a massive deficit.
    ……………………………………………………………………………………………..

    ……..and the pot holes are back with a vengeance

    …….Where did all that money,especially since the wage bill was reduced by $109M?

    David

    We need a restart of the pot hole page.

    Like

  • Missed Walter’s debut show yesterday, this report offered by the Advocate gives a summary.

    https://www.barbadosadvocate.com/news/uwi-dean-speaks-imf-option

    Like

  • Vincent Haynes

    David

    Interesting…….Robinson,is advocating the IMF programme and praising MoF for telling us that we are in duck guts………a reasonable position.

    Like

  • @ Vincent

    You could not have interpreted Robinson’s remarks better and should have prefaced your comments with your trade mark “chuckle.”

    I laughed when I read the article to “see” Robinson trying to “shadow box” between the issues. Robinson is in a dilemma, where he has to appease the government to protect his membership on several government statutory corporations’ Boards of Directors, without trying to compromise his “academic integrity” among his colleagues who have been suggesting government should seek assistance from the IMF.

    Like

  • Prodigal, You know, and Iknow you know, that an IMF team visits the country every year for Article IV CONSULTATIONS. WHEN THEY POINTED OUT A FEW YEARS AGO THAT THERE WAS LITTLE GROWTH IN THE ECONOMY, (ALONG WITH THOSE OF OTHER CARIBBEAN COUNTRIES) IT WAS ACCEPTED, WITH GLEE BY THE NAYSAYERS. NOEW THAT THE ECONOMY “IS ON THE ROAD TO RECOVERY, WHY CAN’T IT BE ACCEPTED WITH EQUAL ACCEPTANCE?

    Like

  • Gabriel,
    If the Dean had a Pauline moment, then the scales would have been removed from his eyes, so that he is seeing things now, as they are. Maybe he was really blind when he expressed the famous phrase.

    Like

  • Interesting that Justin Robinson was the first person invited to the Walters TV show. Where is Walter these days anyway. Hope that he did not have to agree to avoid comment in social media to be host of the show.

    Like

  • David

    You must know full well how the game is played.

    BU has been played in many ways, and the stupid game theory goes on.

    Should circumstances change or revert to the position ante, we are sure we’ll see a recycling of personnel, views, arguments …………. here or there

    When the music stops it’s still all BS, and nothing more.

    Shadows and dust!

    Like

  • Miller,
    Knock it off. The IMF have spoken, and based on what they wrote in the report; I get a copy of whatever they write on Barbados sent to me direct from their office, there is no hint of any sort of devaluation. My advice to you is to pull the old money from under the bed and spend it soon, otherwise you will lose money. The island will soon get an UPGRADE from Moody’s et al.

    Like

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