Barbados

The economy is slowing, following the recovery in 2016, reflecting an increased pace of fiscal consolidation and policy uncertainty, partly relating to the forthcoming elections. International reserves, which are already low, continue to decline. While there is significant progress in reducing the high fiscal deficit, the government will fall short in meeting the ambitious fiscal adjustment targets set in the May 2017 budget. The adjustment, if maintained, will lead to a decline in the debt-to-GDP ratio, but debt will remain unsustainable. Further delays in privatization will lead to a continued decline in reserves, while large financing requirements remain a serious challenge.