IMF approves BDS$280 million for Barbados

(BARBADOS NATION) — Prime Minister Mia Amor Mottley announced yesterday that the Executive Board of the International Monetary Fund (IMF) has approved about BDS$280 million in support, and the money should be in Barbados’ account by today.

This is the fourth IMF disbursement in support of the Extended Fund Facility Programme.

A statement from Government said Mottley made this disclosure today while addressing a group of public officers and employees of the state-owned enterprises, at the gymnasium of the Garfield Sobers Sports Complex.

Mottley was attending a discussion on the Barbados Optional Saving Scheme (BOSS). The Prime Minister later told the media that the BDS$280 million included BDS$180 million, which would assist the country to get through the situation brought about by the novel coronavirus (COVID-19) pandemic, and BDS$98 million to allow for the usual programme disbursement going forward.

“This [IMF] Board approval shows that we were on track with our programme . . . and, more importantly, our plans for how we intend to get out of COVID-19 have been accepted by the Fund and hence, that separate support of US$90 million. . . .

“We are happy with the fact that the approval by the Board would have confirmed that up until March, we were on target with all of what we said we would do . . . . They are also looking at what we do going forward with COVID-19 and, quite frankly, even though we are very much in an uncertain environment, we have set out a broad framework of measures that we believe are the start, even if not the end, because we don’t know what else COVID-19 has to offer as we go forward,” said Mottley.

The Prime Minister said the money from the IMF would give Government a sense of comfort and provide the needed assistance to protect the country going forward. “Even though we are definitely not out of the woods, we are on the right path and we need to stay focused and do what we have to do,” she said.

A statement from the IMF said Barbados’ programme implementation is strong, with all performance criteria for end-March met.

It noted that “since May 2018, international reserves have increased from a low of US$220 million to more than US$850 million at end-April 2020”.

“Barbados continues its strong implementation of the comprehensive Economic Recovery and Transformation (BERT) plan aimed at restoring fiscal and debt sustainability and increasing reserves and growth. The ongoing global coronavirus pandemic poses a major challenge for the economy, which is heavily dependent on tourism, and is expected to have a large impact on the balance of payments and the fiscal accounts,” the statement said.

Following the IMF executive board discussion, Tao Zhang, Deputy Managing Director and Acting Chair said: “Barbados continues to make good progress in implementing its comprehensive Economic Recovery and Transformation plan, with all performance criteria for end-March 2020 met. Prospects for continued strong programme performance are good.

“The policy response to the global coronavirus pandemic is adequate with a reduced primary surplus target of 1 per cent of GDP for fiscal year 2020/21 to accommodate significant revenue losses and support spending on public health and social protection. The reduction of the primary surplus is financed by additional resources from international financial institutions, including an augmentation of the IMF’s extended facility.

“The accommodation in fiscal year 2020/21 will be compensated by higher primary surpluses in the medium term to ensure that the debt target of 60 per cent of GDP in fiscal year 2033/34 is reached.

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