The COVID-19 pandemic is causing a deep recession in Barbados, but implementation of the Barbados Economic Recovery and Transformation (BERT) program remains strong and targets are still being met, an International Monetary Fund (IMF) staff mission reported last week.
The comments came at the end of an IMF staff visit, via videoconferencing, between February 2 and 5, to discuss the implementation of the BERT plan, supported by the IMF under the Extended Fund Facility (EFF).
“The prolonged COVID-19 pandemic continues to have a major impact on Barbados. The economy is estimated to have contracted by about 18 percent in 2020, with a gradual recovery projected to start in 2021,” said team leader Bert van Selm in a statement.
“Tourism arrivals remain at a fraction of normal levels, and recent increases in COVID-19 cases in key source markets, including the US and the UK, will likely delay the recovery. In addition, a recent outbreak of COVID-19 in Barbados led to an ongoing lockdown that will reduce economic activity in the first quarter of this year.”
Despite the COVID-19 shock, van Selm added, Barbados was making some strides.
He said in this very challenging environment, the country continues to make good progress in implementing its ambitious and comprehensive economic reform program while expanding critical investments in social protection.
“Key indicative targets for end-December under the EFF were met. International reserves, which reached a low of US$220 million (5-6 weeks of import coverage) at end-May 2018, increased to more than US$1.3 billion at the end of 2020,” van Selm said.
Discussions for the fifth review under the EFF are scheduled for May.
In October 2018, the IMF agreed to a four-year deal that will see it provide US$290 million for the BERT program, under the EFF.
The government must meet specific targets in order for payments to be disbursed.