IMF Makes USD21 Million Available to Barbados

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The following is the latest IMF Update – Blogmaster

May 7, 2021 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. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

  • IMF team reaches a staff level agreement with the Barbadian authorities on the fifth review of Barbados’ Economic Recovery and Transformation program (BERT) supported by the Extended Fund Facility.
  • In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program.

Washington, DC: At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a virtual mission between May 3-7, 2021 to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF). To summarize the mission’s findings, Mr. van Selm made the following statement:

“Following productive discussions, the IMF team and the Barbadian authorities reached staff-level agreement on the completion of the fifth review under the EFF arrangement (Press Release 18/370). The agreement is subject to approval by the IMF Executive Board, which is expected to consider the review in June. Upon completion of the review, SDR 17 million (or about US$24 million) will be made available to Barbados.

“Barbados’ economy remains severely depressed by the ongoing global pandemic. Tourism came to a virtual standstill from April 2020 onwards and remains at a fraction of normal levels. Economic growth for 2021 is premised on a modest recovery of tourism in the second half of 2021. Risks remain elevated, including in light of the impact of recent volcanic activity in neighboring St Vincent. 

“In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program. A new central bank law was adopted by parliament in December 2020—a critical safeguard for continued prudent macroeconomic policy. International reserves, which reached a low of US$220 million (5-6 weeks of import coverage) in May 2018, are now at a comfortable level of US$1.3 billion. Quantitative targets for end-March under the EFF were met except for the performance criterion on central government transfers and grants to public institutions, which was exceeded owing to measures to address the COVID-19 health crisis (including the vaccination program executed by the national hospital).

“The Government of Barbados is targeting a zero percent of GDP primary balance for FY2021/22 (compared to a deficit of 1 percent of GDP in FY2020/21). This fiscal stance reflects a projected modest recovery in tourism and facilitates COVID-related emergency outlays on health facilities, medical supplies, and income support to the most vulnerable. The authorities’ long-term debt target of 60 percent of GDP will be pushed out by two years (from FY2033/34 to FY 2035/36) to reflect the impact of the pandemic on the economy; the authorities remain firmly committed to reducing public debt over time.

“The team would like to thank the authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: David Sharrock

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

@IMFSpokesperson

147 thoughts on “IMF Makes USD21 Million Available to Barbados”


  1. Rolling my eyes
    U can have the last word

    But look my crosses a simple assessment of a caller comment on a local.radio show has brought out anxiety in one of BU ” know it all” bloggers
    Peace bro don’t ever say I gave u high blood pressure

    Reply ↓

  2. The AG says the RBPF is doing a good job in tackling crime
    Yuh wonder which rock he living under
    Crime and violence has escalated in the past two years
    Criminals are now longer afraid to commit crime wherever and whenever
    Recently during broad daylight a person carried out fearlessly a criminal act where several people were injured
    Have yet to hear the AG views on this kind of violence that creates terror
    The AG got to be living in wonderland

    Reply ↓

  3. @ David

    I’ve just read COP Griffith may retire at month-end, after 46 years in the service.

    We have to thank him for the dedication he gave to RBPF and wish him good health and all the joy and happiness retirement can bring.

    Reply ↓

    • @Artax

      He appears to be a trooper. The blogmaster has a feeling we needed a more active COP in the period served but you cannot blame him entirely, he did not appoint himself.


  4. @ David

    I agree with you. Seems as though he was ‘marching time’ until retirement.

    If we’re honest, we’ll acknowledge the fact Griffith’s appointment came at a time when the former administration used their goon, Guyson Mayers, to politicized the RBPF.

    I’m sure you recall, for example, the Court case involving the ‘squashing’ of promotions, which is now set to be heard by the CCJ.

    RBPF should be an independent organisation, free of political involvement by both the BLP and DLP…… or any other political administration.

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  5. @ David May 12, 2021 9:27 AM

    It is recommended the post of CoP- in keeping with the current administration’s proposed policy on senior public sector jobs- be put up for tender on a 3 to 5 year renewable contract basis and applications for the job be open to ‘trained’ police officers from other regional and Commonwealth countries.

    This might just be the panacea for the incestuously political disease ‘rumoured’ to be affecting that organization.

    The re-branding of that ‘Force’ will involve a tidy sum of the recently borrowed IMF money along with a total makeover of the existing Constitutional arrangements governing its operational and reporting structures.

    What do you think, Sir Blogmaster, KCMG?

    Reply ↓

    • @Jamal Miller

      The post of COP{ is a critical one like that of the DPP, the blogmaster maybe sentimental but is of the view it should be homegrown.


  6. @ David May 12, 2021 5:37 PM

    Doesn’t the post of ‘Permanent’ Secretary carry similar ‘weight’; at least on the pay scale?

    Should this post be also reserved for a “home-grown” politically-manipulated lackey?

    How about that of Auditor General which carries similar insulation from political machinations as enshrined in the Constitution?

    Aren’t the recommendations from that “apolitical” office treated like the barking of a toothless Bajan salmon tot retriever?

    Reply ↓

    • @Miller

      The two positions are different based on blogmasters weighting. It is a subjective thing maybe.


    • PRICE HIKES ‘ON WAY’
      By Shawn Cumberbatch
      shawncumberbatch@nationnews.com
      Barbadians will likely have to dig deeper into their pockets to put food on the table.
      That is the implication of international food prices being at their highest in seven years and a simultaneous spike in the cost of shipping.
      Officials say the pressure is being felt by importers and the local farming community, who said they are unlikely to be able to continue absorbing the increased costs.
      While the Barbados Chamber of Commerce and Industry (BCCI) is canvassing the views of its membership in the food trade to determine how they will be dealing with the higher prices,
      one of its former presidents, Andy Armstrong, confirmed that the cost of some food items was likely to increase next month.
      The director of Armstrong Group of Companies told the Sunday Sun that in the last five years “there has been little movement on prices [but] things are different in 2021”.
      The first challenge was the higher cost of importing items, including food.
      “Freight costs have increased for almost every item that we import, including for raw materials imported to manufacture products. In some cases the increases have been modest, increasing the overall cost of the products by a few percentage points; in these cases we have absorbed most of these increases,” he reported.
      “In other cases the freight
      increase has been substantial, especially for goods out of China where, if you can secure a container at all, you can pay up to four times what you were paying in 2020. For goods out of China it is not possible to absorb the increase. We will start to see the impact of that increase in June.”
      Fallout
      Armstrong said the fallout of the increased freight rates was compounded by having to pay more to source food items.
      “In the last three months we have also been informed of a number of items where the first cost, before freight, has also been increased. This includes items such as flour, ketchup, biscuits and aluminum foil. When the price of the item and the price of the freight both increase it is not possible to hold prices,” he said.
      “At this point we have not moved prices as these items are in transit but, once they are here and we are selling the items that cost more, then prices will be increasing. A lot of the increases are not big – around five per cent more but some are significant – ketchup, for example, is going up by 22 per cent. Expect some of these increases by June.”
      He added: “It’s very important to note that we are not ‘price gouging’, which is increasing our markups on items to take advantage of shortages. In fact, in almost all cases, we are cutting our markups but, with the cost increases that are coming through, even that will not be enough to keep some prices from going up.
      “It’s also important to point out that not every brand may go up by this much so that, if price is the most important factor, then consumers should shop around.”
      Barbados Agricultural Society chief executive officer James Paul said with the international price of grains and cereals at their highest in recent years, farmers were bracing for higher costs, including the possibility of increased feed prices.
      He was unsure how long the anticipated heavier financial load could be carried by farmers.
      “Right now our farmers are under tremendous pressure. Worldwide commodity prices are on the increase and as a matter of fact from what we can see in respect of some commodities they have gone up to record levels,” he said.
      “The last time that we saw anything like this was around 2013 but it quickly modulated itself. From what we are seeing right now there seems to be very little likelihood that international prices are going to modulate themselves in any hurry and this is a very worrisome thing for farmers,” said Paul.

      Source: Nation


    • Small businesses get $1m finance lifeline
      Several non-bank lending agencies have thrown out at least $1 million in lifeline financing to rescue micro, small and medium-sized enterprises (MSMEs) from the economic stranglehold of the pandemic and continue to help them to get restarted after national lockdown.
      At a recent webinar on Financing Start-ups And Business Ideas,
      the Financial Literacy Bureau said many small businesses were helped to stay afloat as it made a case for start-ups getting more than funding in a full package of support that also provided developmental training for entrepreneurs, and in times of uncertainty such as the COVID-19 pandemic, refinancing options and suspension of loan repayments.
      The bureau was launched in October 2020 to help local households and businesses to better manage their finances.
      Technical advisor in the Ministry of Energy, Small Business and Entrepreneurship responsible for the bureau, David Simpson, told the Zoom and Facebook audience – who tuned in to hear panellists from the Barbados Youth Business Trust, the City of Bridgetown Credit Union, FundAccess, the Barbados Trust Fund and the Barbados Entrepreneurship Foundation – that all of the agencies had responded to their clients to ensure
      that they are able to manage the effect of COVID-19.
      “All the agencies have been refinancing. In some cases, special deals have been provided for clients who were near the end of their loans to take advantage of reduced pay-offs and that type of thing.
      “In terms of the amount of funding involved in the grants, the moratorium and so on, we’re into more than a million dollars in relief that has been provided by any one agency.”
      Moratorium
      Simpson, who is also chairman of FundAccess, noted that all clients were given a moratorium when COVID-19 hit in 2020 and, in most cases, they also got an extension as the pandemic persisted into 2021.
      “And what has been happening for the past three months . . . is that, where need be, we have provided grants in the case of FundAccess to our clients. In one instance, there were COVID-related grants to allow some businesses to acquire things like [personal protective equipment].
      “In other instances, there have been grants, which we’re still going through with clients to help them get started after all the stoppages and pauses to acquire stock, to maybe pay rent arrears,” he said.
      He pointed to one of the core philosophies of FundAccess and the other non-bank financial institutions of ensuring that entrepreneurs were supported to ensure they got the funding they required.
      “We don’t really tell anyone, ‘No, you can’t be funded’. You either get a yes or you get a detailed response as to what you need to do to go away and come back to get the final yes,” Simpson said. (SNR)

      Source: Nation


    • Eye on country’s economic growth

      Mon, 05/17/2021 – 5:00am

      ECONOMIC growth in Barbados will have to average between 2.5 per cent to three per cent in the coming years in order for the country to lower its debt to GDP ratio, which currently stands at 153 per cent.

      That is the view of Government’s Chief Economic Advisor, Dr. Kevin Greenidge, during an exclusive interview with Business Monday.

      Dr. Greenidge said that an average of that amount will bring the debt down to at least 100 per cent.

      Central Bank of Barbados data have not shown that type of consistent economic growth during the last 12 years or so, as recessions and more recently COVID-19 have dealt a big blow to the island’s growth trajectory.

      The nearest the economy has come to the 2.5 per cent to three per cent projected expansion pointed to by Dr. Greenidge was in 2015 and in 2016.

      The economy grew 2.4 per cent in 2015 and 2.6 per cent in 2016, but growth was 0.6 per cent in 2017, slowing the momentum, the Bank’s data showed.

      The Bank’s Governor Cleviston Haynes has acknowledged that the original target of bringing the debt ratio to 60 per cent by 2033 had been adjusted.

      Quoting from the International Monetary Fund (IMF) report earlier this month, Dr. Greenidge said that Barbados’ long term debt target of 60 per cent of GDP will be pushed out by two years from FY2033/34 to FY2035/36 to reflect the impact of the COVID pandemic on the economy.

      Dr. Greenidge dismissed suggestions in some quarters that Barbados may be in line for another round of austere economic measures.

      In addition, he is not bothered by the rise in the ratio, saying that this stemmed from the fall in GDP.

      The advisor is also optimistic about growth returning to the economy, noting that the forecast is for a strong fourth quarter tourism season, and capital projects which will add to the economy’s expansion.

      Barbados Advocate


    • GROWING TAX BURDEN

      THE tax burden on Barbadians continues to increase and the Government, through its borrowings, has emerged as the second most important source of foreign inflows.

      These are some of the points raised by former Central Bank of Barbados (CBB) Governor, Dr. Delisle Worrell.

      He was at the time analysing the performance of the Barbados economy during the first quarter of 2021.

      Using CBB charts to assess how the economy performed, Dr. Worrell, who is an international consultant, said that compared to 2017/2018, the tax burden in Barbados in 2020/2021 was 1.5 points of GDP, whereas expenditure was two two points higher.

      The tax burden gives a breakdown of the level of taxes a government imposes on a country.

      It does not include non- tax revenue.

      According to Dr. Worrell, other charts in the presentation show that:

      Foreign reserves fell $86m in the first quarter (of 2021), the first downturn since 2017;

      The debt/GDP ratio at March was five points higher than at the end of 2017;

      The servicing of external debt absorbed 12 per cent of foreign earnings;

      He also said that the deficit was five per cent of GDP in first quarter, almost the same as for the 2020/21 fiscal year.

      As for foreign inflows, he said the foreign borrowings by government up to last year were five percentage points above those of 2018.

      The charts show Government foreign borrowing provided 77 per cent of the foreign reserves accumulation in 2018, 81 per cent in 2019 and 82 per cent in 2020;

      Tourist earnings provided 24 per cent of foreign exchange inflows; Government borrowing was the second most important source of foreign exchange inflows, at 20 per cent;

      Payments for services from abroad far outweigh the amount of FX received from the international business and financial sector;

      In 2020 Government borrowing contributed almost twice as much to FX inflows as did foreign direct investment;

      There was a 27% drop in VAT receipts in FY2020/21; company taxes almost doubled;

      The valued added tax (VAT) provides one-third of Government revenues, twice the contribution of the income tax;

      Wages and grants to state enterprises and UWI together take half of Government’s spending;

      Domestic interest payments have been cut drastically, and subsidies less so, but the wages bill is slightly higher than it was in 2017.

      Source: Barbados Advocate


    • Another loan.

      Nod likely for $200m loan
      By Shawn Cumberbatch
      shawncumberbatch@nationnews.com
      Barbados is on course to have a $200 million World Bank loan in the bag by next month.
      Based on information from a team led by senior economist Anton Dobronogov, the financial institution’s Board of Executive Director’s will on June 24 consider a recommendation to approve the loan.
      The clearest signal that Barbados will get the funds came on Tuesday when the World Bank announced that its board said yes to a $200 million COVID-19 Response and Recovery Development Policy Loan for The Bahamas.
      The Bahamas, like Barbados, was graduated from World Bank funding because they were deemed high income countries, but the institution is making a funding “exception” because of the fallout from the COVID-19 pandemic.
      A May 10, 2021 World Bank appraisal of the Barbados COVID-19 Response and Recovery Development Policy Financing (DPF) programme, stated: “The development objective of this operation is to support Barbados’ response to the COVID-19 crisis and to promote the post-crisis economic recovery.”
      The bank said while as a graduate Barbados does not have a country partnership framework with it, the proposed DPF “would support the Government’s COVID-19 response and recovery in line with the World Bank’s approach to providing support to countries as they tackle the unprecedented threats posed by the COVID-19 crisis”.
      “It aims at saving lives threatened by the pandemic; protecting the poor and vulnerable; securing foundations of the economy; and strengthening policies and institutions for resilience based on transparent, sustainable debt and investments,” the bank said.
      “The operation also aims to support the government’s efforts to tackle poverty exacerbated by the crisis and promote shared prosperity and inclusion during the recovery. The proposed operation is aligned with the bank’s climate change policy commitments and would support the country’s overall resilience to climate, health, and economic shocks.”
      The World Bank added that its “exceptional” financing to Barbados would complement International Monetary Fund support and other official creditors by helping the country “partially cover its financing needs in financial year 2021 and to support the country’s return to market-based financing over the medium term”.
      Debt risks exacerbated
      “Barbados continues to make progress in implementing its BERT [Barbados Economic Recovery and Transformation] plan to restore fiscal and debt sustainability, rebuild reserves and increase growth. However, the debt risks have been exacerbated by the COVID-19 economic downturn in 2020,” the bank said.
      “Barbados’ rapid response to COVID-19 and management of the pandemic has limited the number of infections and deaths but the pandemic has significantly impacted the economy. COVID-19 presents a severe shock to tourism-dependent small island states like Barbados.
      “The disruptions in international trade and travel, local containment measures, as well as the global recession, have dramatically halted the tourism sector and adversely affected domestic production, as business activity has been reduced in an effort to contain the spread of the disease.”
      In outlining to the World Bank’s board why Barbados needed the funding, the institution’s team pointed to last year’s double digit economic contraction, increased unemployment and poverty and higher debt.
      “The estimated 17.3 per cent decline in GDP in 2020 reduced employment and increased poverty. The fallout in the tourism sector and disruptions to local production are expected to depress growth, resulting in a third consecutive year of recession,” said the bank appraisal.
      “The still high level of public debt limits space for counter-cyclical fiscal policy measures to lift growth and reduce poverty. Middle-income households (those that earn between one and four times the minimum wage) are so far the most affected by the economic shock, accounting for half of the reported job losses and one third of reported business closures.
      “Unemployment claims in 2020 reached roughly one-third of the workforce. A further deepening and prolongation of the COVID-19 crisis is the main risk.”
      The IMF’s Executive Board is to also consider further funding for Barbados, $48 million, next month.

      Source: Nation


  7. Wonder how many small businesses can that 1 million help out of the economic doldrums
    If what has been happening with the number of small business closures daily
    It begs to ask how many business has this well intention plan helped in the past two years

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  8. The above analysis give sufficient food for thought sufficient and enough to ask govt what are govt plans to take favourable control of Barbados economy
    First priority one of increasing employment levels
    Right now the tax burden is back breaking barbadian households suffers in silence

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