Barbados: Third Reviews Under the Arrangement Under the Extended Fund Facility, Arrangement Under the Resilience and Sustainability Facility, and Request for Modification of Performance Criteria-Press Release; and Staff Report

THIRDREVIEWS UNDERTHE EXTENDEDARRANGEMENT UNDER THEEXTENDED FUNDFACILITY,ARRANGEMENTUNDER THE RESILIENCEAND SUSTAINABILITY FACILITY, AND REQUEST FORMODIFICATION OFPERFORMANCE CRITERIA In the context of theStaff Report for theThirdReviews Under theArrangement Under theExtended Fund Facility,ArrangementUnder the Resilience and Sustainability Facility,andRequest for Modification of Performance Criteria, the following documents have beenreleased and are included in this package: •Press Release •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’sconsideration ona lapse-of-time basis,following discussions that ended onMay 21,2024, with the officials ofBarbadoson economic developments and policies. Based oninformation available atthe time of these discussions, the staff report was completedonJune12, 2024. TheIMF’s transparency policy allows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reportsandother documents. Copies of this report are available to the public from International Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.orgPrice: $18.00per printed copy International Monetary FundWashington, D.C. IMF Executive Board Concludes the Third Reviews Under theExtended Fund Facility and the Resilience and SustainabilityFacility with Barbados FOR IMMEDIATE RELEASE •TheIMF Executive Boardconcludedthe third reviews under the Extended FundFacility(EFF) and the Resilience and Sustainability Facility (RSF),allowingfor an immediatedisbursementofSDR 14.175 million (about US$19million) under the EFF and SDR 28.35million (about US$37 million) under the RSF. •Barbados’ economy hasrecovered to pre-pandemic levelsand the external positionhasimproved.GDP growth is expected to remain strong in 2024, driven by dynamism in tourismand related sectors. •Implementation of the home-grown Barbados EconomicRecoveryand Transformation(BERT 2022) plan and the ambitious climate policy agendacontinues to bestrong. Washington, DC–June 28, 2024:The Executive Board of the International Monetary Fund(IMF) concluded theThird Reviews of the Extended Fund Facility(EFF)and the Resilienceand Sustainability Facility(RSF) arrangementswithBarbadoson a lapse-of-timebasis.1Theconclusionof the reviewsallowsthe authorities to draw the equivalent of SDR 14.175million(about US$19million)under the EFF and SDR 28.35 million (about US$37 million) under theRSF.This brings total disbursements under the EFF to SDR 56.7 million (about US$75million)and SDR 85.05 million (about US$112million)under the RSF. In 2023, the Barbadian economy grew by an estimated 4.4 percent, driven by a rebound intourism and related sectors. Inflation moderated graduallywith the easing ofinternationalcommoditypricesbut remained somewhat elevated due to higher pricesof certain domesticcrops,reflecting adverse weather conditions and stronger demand for tourism-relatedservices. Theexternal position strengthened,with thecurrent account deficit narrowingto 9percent of GDPandample international reserves (US$1.5 billion at end-2023; equivalent toover 7 months of imports)continuingto support the exchange rate peg. GDP growth is expected to remain strong in 2024, driven by further growth in tourist arrivals.Inflation is projected to moderate to 3.1 percentby end-2024, in line with global commodityprice trends and the recovery in domestic agricultural production. The current account deficit isexpected to narrow further to 7.4 percent of GDP.Nevertheless, risks to the outlook remainelevated, withBarbadosremainingvulnerable to potential global economic and financialshocks and natural disasters. These risks are mitigated by the authorities’excellenttrackrecordofimplementation and strongcommitment toreform. Programperformanceremainsstrong. All quantitative performance criteria and indicativetargets for the third review of the EFF were met.The authorities exceeded the primary surplustarget for FY 2023/24and are targeting 4 percent of GDP for FY 2024/25. Public debt hasfallen back to pre-pandemic levels andthe authorities remain committed tobringingitdownto60 percent of GDP by FY 2035/36.Theauthorities metkeystructural benchmarks, includingreformstostate-owned enterprises,the public pension scheme, the tax and customsexemption regimes, public procurementprocesses, and public financial management. The twoRSF reform measures set for the third review werealsoimplemented, supporting thegovernment’s ambitious climate-policy agenda. A new Stormwater Management Act toimprove flood resilience was tabled in Parliament and an Energy Efficiency and ConservationPolicy Framework for government agencies and public lighting was approved by Cabinet. BARBADOS THIRD REVIEWS UNDER THE EXTENDED ARRANGEMENTUNDER THE EXTENDED FUND FACILITY, ARRANGEMENTUNDER THE RESILIENCE AND SUSTAINABILITY FA