Barbados: Fourth 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 for Barbados

The authorities’ implementation of the home-grown Economic Recovery and Transformation (BERT 2022) plan and their ambitious climate policy agenda remain strong, supported by the IMF’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF). Economic growth in 2024 has been robust and inflation has continued to moderate, on the back of easing global commodity prices and lower domestic service prices. The external position continued to strengthen, and international reserves rose further to US$1.6 billion at end-September 2024, supporting the exchange rate peg. The near-term outlook remains positive. While Hurricane Beryl caused significant damage to the fishing sector and some coastal infrastructure, the macroeconomic impact is expected to be relatively moderate, in part reflecting its occurrence during the off-peak tourist season. Nevertheless, the shock once again demonstrated Barbados’ vulnerability to climate change and natural disasters. In this regard, the authorities remain committed to improving the fiscal position and maintaining debt sustainability, while creating fiscal space to increase needed investment, including to boost climate resilience. At the same time, the government is continuing to advance structural reforms to achieve more inclusive, sustainable growth.