Barbados: Fifth Reviews Under the Extended Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Alternate Executive Director

The authorities’ implementation of the home-grown economic recovery and transformation (BERT 2022) plan and ambitious climate agenda has remained strong, supported by the IMF’s Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) arrangements. Economic activity was robust in 2024, driven by tourism, construction, and business services. Inflation moderated further due to the easing of global commodity prices and prices of domestic goods and services. The external position continued to improve, with the current account strengthening further and international reserves remaining ample at US$1.6 billion (equivalent to over 7 months of import cover), supporting the exchange rate peg. While the near-term outlook remains stable, risks are tilted to the downside, given the highly uncertain external economic environment and Barbados’ vulnerability to external shocks and natural disasters.