At the request of the Government of Barbados, an International Monetary Fund (IMF) team, led by Deputy Division Chief for the Caribbean Bert Van Selm, conducted a staff visit via videoconferencing between August 25-28, to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF).

In the mission’s findings, van Selm indicated that 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,” van Selm stated in his report.

“In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform programme, while expanding critical investments in social protection,” he continued.

When van Selm visited Bridgetown earlier in February, he reported that the completion of the external debt restructuring in December 2019 has reduced economic uncertainty, and the agreed terms with creditors would help to keep public debt on a clear downward trajectory.

According to him, international reserves, which reached a low of US $220 million (5-6 weeks of import coverage) at the end of May 2018, are now in excess of US$1 billion, which met all indicative targets for end of June under the EFF.

He added that the targets for international reserves, net domestic assets, and the primary balance were met with some margin, which bodes well for meeting the end of 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,” he stated.

The fourth review under the EFF for the country is in late October.