An International Monetary Fund (IMF) team, led by Michael Perks, recently concluded a visit to Bridgetown, Barbados. The visit, which took place from February 25-28, 2025, aimed to review the country's economic developments and reform efforts in preparation for the fifth and final reviews of the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs.
Michael Perks provided an overview of the mission's findings. He stated that "Barbados’ economic growth remained robust in 2024," with real GDP growth estimated at 4 percent. This growth was primarily driven by business services, tourism, and construction sectors. Inflation rates moderated to an average of 1.4 percent due to easing global commodity prices and domestic goods pricing. Additionally, the external position improved as the current account deficit narrowed to 4.5 percent of GDP from 8.6 percent in 2023.
Perks highlighted that international reserves are substantial at US$1.6 billion, equating to over seven months of imports, which supports the exchange rate peg. Despite a positive near-term economic outlook, he cautioned that risks remain high due to Barbados' susceptibility to global shocks and natural disasters.
The IMF noted strong progress by Barbadian authorities in implementing their ambitious economic reform program. End-December 2024 targets under the EFF were met successfully. Fiscal performance has been robust with a primary balance reaching 5.3 percent of GDP through December, keeping authorities on track for a fiscal target of 3.8 percent of GDP for FY2024/25.
Structural reforms continue with support from IMF technical assistance focusing on customs administration improvements, public-private partnership frameworks, and Central Bank liquidity forecasting enhancements. Progress is also being made on RSF reform measures ahead of the last review.
The IMF team expressed eagerness for discussions scheduled in May for the final reviews under both EFF and RSF programs and extended gratitude towards Barbadian authorities for their hospitality and openness during discussions.