ST JOHN’S, Antigua – The International Monetary Fund (IMF) says Antigua and Barbuda has made “excellent progress” towards achieving its goal of restoring debt sustainability and macroeconomic stability.

An IMF mission headed by Geoffrey Bannister has recently completed a review of the 2010 multi-million dollar Stand-By Arrangement (SBA) to the island.

“On the fiscal side, the fiscal outturn for March 2013 was well above programme targets, surpassing the performance criterion on the overall fiscal balance and the indicative target for the primary balance by a wide margin..

“This was partly as a result of strong revenue performance in the first quarter, in line with programme targets due to a large one-off reduction of tax arrears and partly to continued expenditure restraint,” Bannister said.

He said the first quarter results put the economy “on a good footing” to achieve the annual fiscal targets for 2013: a central government primary surplus of 3 per cent of Gross Domestic Product (GDP) and an overall surplus of 0.3 per cent of GDP.

“Notable progress has also been made on structural reforms, with five important benchmarks completed in March-April,” he said, noting that a new Customs Control and Management Act (CCMA), consistent with international best practice, was presented to Parliament on April 5, and the Harmonized System 2007 customs code for classifying imports was implemented on April 2.

The mission chief said technical assistance in March also facilitated the completion of a tax expenditure study and the establishment of an institutional oversight and reporting framework for state-owned enterprises within the Ministry of Finance.

In addition, he said the Baldwin Spencer administration adopted a system to improve commitment control for capital expenditure projects.

Bannister said of the remaining fiscal reforms under the program, the IMF expects that two “important benchmarks” linked to the presentation to Parliament and passage of the Tax Administration and Procedures Act (TAPA) will also be completed before June.

He also said that the IMF expects that 24 out of the 28 fiscal, debt, civil service and public enterprise reforms under the programme will have been achieved by the end of the programme in June, “a noteworthy accomplishment that will help sustain positive fiscal and macroeconomic results going forward”.

Bannister said some progress has also been made on financial sector issues, stating that stand-alone legislation to govern the Financial Services Regulatory Commission (FSRC) is “on track” for presentation to Parliament by mid-May 2013 and efforts continue towards improving compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards.

He noted that the resolution of ABIB is entering its final stages, with associated financial sector benchmarks expected to be finished by end-May, and the entire process projected to be completed shortly thereafter.

“We encourage the authorities to continue to work to conclude this process as quickly as possible, as it has already been delayed a number of times,” Bannister said.

In reflecting on Antigua’s SBA over the past three years, he said the government has “come a long way.

From an overall fiscal deficit of 18 per cent of GDP in 2009, and a debt-to-GDP ratio of 102 per cent, Bannister said the government’s programme of fiscal consolidation and structural reforms, together with debt relief from external and domestic creditors, resulted in an average overall deficit of 1.7 per cent of GDP from 2010-12 and brought the debt-to-GDP ratio down to 89 per cent at end-2012.

“These results were achieved during a period of significant economic contraction, in the face of a difficult external economic environment and domestic financial challenges,” he said, adding that Antigua’s reform commitment started to pay dividends in 2012, when the economy saw positive growth for the first time in three years.

“For 2013, we expect this positive trend to continue, with a further recovery in growth and a small overall fiscal surplus,” hesaid, warning however “the road ahead will not be easy, and it is important that the authorities maintain fiscal discipline to secure the hard-won gains of the past three years.

“The authorities have demonstrated strong commitment to the policies and objectives of their Fiscal Consolidation Programme, and recognize the importance of strong macroeconomic, financial and structural policies in achieving the goals of their National Economic and Social Transformation plan,” he said.