Securing Your Future Is Our Main Investment

Updated: 05-10-2022 - 12:00PM   4 6 CLOSED

Financial News

Oct 2005 Financial News

IMF official optimistic about Barbados' economy

Oct 20, 2005

AN International Monetary Fund (IMF) official has congratulated the Barbados Government for confronting the challenges which face the economy and he believes Government, with adequate policies maintained, is on the right path to achieving debt reduction and macroeconomic stability.
Benedict Clements, Advisor  Western Hemisphere Department for the IMF, made the remarks while attending the recently concluded two-day Public/Private Sector Consultation on the Economy. Clements was present at the event at the invitation of Prime Minister Owen Arthur, who had suggested to the official to come and get a first hand look at some of Barbados' efforts to enhance the economy through such forums.

"Barbados has a history of good policy making and adapting well to its challenges so it is confronting challenges and we remain confident that policies will be adequate to help secure long-term growth, but indeed there are challenges as the Prime Minister noted," he told the media.

"I would congratulate the Government for confronting these realities and recognising what the challenges are and wish them the best in these challenging times," Clements added. Clements was one of two IMF officials at the consultations. The other was George Bindley-Taylor.

"We recognised Barbados' tradition of good economic management growth has been strong recently and the outlook is favourable in the near term. What we also pointed to, though, at the same time some of the same issues the Prime Minister referred to in terms of the challenges addressing the large current account deficit and the challenge of reducing public debt so we see these challenges in a very similar way as the Prime Minister," the advisor said.

"Our recent analysis indicated that Barbados can achieve macroeconomic stability. We agreed there is a need to enhance competitiveness, but as our report indicated within the current macroeconomic framework Barbados can achieve macroeconomic stability with adequate management."

Clements also responded to questions related to Barbados' exchange rate, noting, "We indicated in our report that under the current exchange rate you could achieve macroeconomic stability, that is with adequate management under the fixed exchange rate with adequate credit and fiscal policies. We endorse the Government's strategy of reducing debt over the long haul as we indicated in our report. It would be useful to complement some of the expenditure-based measures they have planned with revenue enhancing measures also," Clements advised.

He noted, though, that Government has a good understanding of what the main issues are in terms of challenges and the IMF stands ready to support Barbados with further dialogue on these issues.

"We agreed that it is a useful target to think of a reduction in the public debt ratio. We have indicated it would be useful to start moving in a downward trend to helping reduce the debt to GDP ratio, which is also a goal that the Government has. We know that, given international experience, debt levels would actually be an impediment to long-term sustainable growth," he said.

Meanwhile, Clements also defended the IMF's method of compiling its country reports.

"Even though we only come here once a year, at the same time, we are still analysing and keeping track of developments from headquarters. We also, as we do our work on Barbados, draw on experiences of other countries. Also, ... I think our analysis is of a very high quality," he said noting that related reports from agencies such as Standard and Poors and the IDB are also taken into account by the IMF."

The Barbados Advocate
Wednesday, 19th October, 2005