At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a staff visit via videoconferencing between August 25-28, 2020 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:
“The COVID-19 pandemic has had a major impact on Barbados’ economy, with a double-digit decline in economic activity projected for 2020. Tourism came to a virtual standstill between March and June 2020: airlift declined precipitously, most hotels closed, and occupancy plummeted at facilities that remained open. In early July, the island cautiously started reopening the economy for international tourists, after the authorities effectively halted local transmission of the disease.
“In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection. International reserves, which reached a low of US$220 million (5-6 weeks of import coverage) at end-May 2018, are now in excess of US$1 billion. All indicative targets for end-June under the EFF were met. The targets for international reserves, net domestic assets and the primary balance were met with some margin, which bodes well for meeting the end-September EFF targets.
“Good progress also continues to be made towards implementing structural reform under the EFF. The two structural benchmarks for end-June 2020, related to tax and customs administration, were both met. A revised central bank law is expected to be ready to be sent to Parliament in September.
“The team is looking forward to conducting discussions for the fourth review under the EFF in late October and would like to thank the authorities and the technical team for their openness and candid discussions.”