The executive board of the International Monetary Fund (IMF) has completed the fifth and final reviews of Barbados’ Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) arrangements, unlocking a combined disbursement of US$58 million for the island.
In a statement issued Friday, the IMF said the completion allows Barbados to draw US$19 million under the EFF and US$39 million under the RSF, bringing total disbursements to US$116 million and US$193 million, respectively.
The Washington-based institution reported that Barbados’ economy remained robust in 2024, with estimated growth of four per cent, fuelled by tourism, construction, and business services. Inflation eased to an average of 1.4 per cent, reflecting declining global commodity prices and lower costs for domestic goods and services.
The country’s external position also strengthened, with the current account deficit narrowing to 4.5 per cent of GDP, bolstered by strong tourism earnings and lower import costs. Gross international reserves stood at US$1.6 billion at the end of 2024, equating to more than seven months of import cover—providing solid backing for the country’s exchange rate peg.
Looking ahead, the IMF projects Barbados’ economy will grow by 2.7 per cent in 2025, with ongoing tourism-related construction and government investment driving the expansion. However, inflation is expected to rise slightly, owing to higher non-fuel import costs and increased prices of some domestic agricultural products.
“Nevertheless, risks to the outlook are tilted to the downside, amidst the highly uncertain external economic environment and Barbados’ continued vulnerability to global shocks and natural disasters,” the IMF cautioned.
The Fund commended Barbados for its strong programme performance, confirming that all quantitative targets and structural benchmarks were met. The government exceeded its primary fiscal surplus target for FY 2024/25, and aims to reach 4.4 per cent of GDP in the upcoming fiscal year. Public debt has fallen below 105 per cent of GDP, with a commitment to reduce it to 60 per cent by FY 2035/36.
Among key structural reforms completed under the EFF were a human resources assessment at the Barbados Customs and Excise Department, the preparation of a public-private partnership (PPP) framework, and the development of a daily liquidity forecasting tool.
Under the RSF, Barbados also advanced efforts to integrate climate considerations into public financial management, including project appraisal guidelines, improved fiscal risk analysis, and the Central Bank’s inclusion of climate risk in stress testing.
IMF Deputy Managing Director Bo Li praised the country’s performance, saying:
“The implementation of Barbados’ homegrown Economic Recovery and Transformation programme has remained strong, supported by the EFF and the RSF arrangements.”
He added that the completion of the final reviews marks the successful conclusion of the IMF-supported programmes.
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