IMF Staff Concludes Virtual Visit to Antigua and Barbuda

IMF Staff Concludes Virtual Visit to Antigua and Barbuda

February 16, 2022

End-of-mission press releases include statements from IMF staff conveying preliminary findings after a visit to a country. The views expressed in this statement are those of IMF staff and do not necessarily represent the views of the IMF Executive Board. This mission will not give rise to a discussion in the Council.

  • Antigua and Barbuda’s economy is on the path to a steady recovery, supported by strong tourism and construction activity.
  • Fiscal consolidation is underway despite the pandemic. Resolute implementation of the government’s medium-term fiscal strategy, backed by well-designed policy measures, will be key to putting debt on a firm downward path.
  • The performance of the financial sector has improved. Close and continued monitoring of asset quality is warranted as loan moratoria expire.

Washington D.C.:
A team from the International Monetary Fund (IMF), led by Mr. Varapat Chensavasdijai, met virtually with the authorities of Antigua and Barbuda from February 7 to 11, 2022 to discuss recent economic developments and policy priorities. At the end of the visit, Mr. Chensavasdijai made the following statement:

“Antigua and Barbuda’s economy is recovering from the COVID-19 pandemic. Real GDP growth is estimated at 4.8% in 2021, following a sharp contraction of 20.2% in 2020. A recovery buoyant tourism and construction activity is expected to support real output growth of 7% in 2022. fully vaccinated, which is among the highest rates in the Caribbean. from the emergence of new virus variants) and supply chain disruptions could hamper the recovery at the same time as wage and price pressures intensify.

“The government is determined to achieve the objectives of its medium-term fiscal strategy to reduce the public debt-to-GDP ratio to less than 70% by 2030. Despite the pandemic, fiscal consolidation resumed in 2021 and the deficit primary has shrunk to 1.8% of GDP. (compared to 3.8% in 2020) reflecting domestic revenue mobilization, external grants and reprioritization of spending. The 2022 budget envisions a zero primary balance, with an ambitious capital spending plan funded by higher revenue, grants and borrowing. The uncertain revenue outlook underscores the need to streamline tax exemptions, strengthen tax compliance, and fully implement tax and customs administration reforms. It will also be important to assess the costs and benefits of current energy pricing mechanisms given rising international oil prices. It will be essential to contain spending on salaries and transfers and to improve the management of public finances. In addition, the authorities should give priority to clearing arrears to suppliers and creditors while avoiding the accumulation of new arrears.

“The financial sector is showing signs of recovery. Banks are well capitalized and liquid, but credit growth has been slow, especially for the household sector. Loans under moratorium in banks and credit unions decreased significantly in 2021 and non-performing loan ratios remained stable. Nevertheless, supervisors should closely monitor asset quality and ensure that loan loss provisioning is commensurate with credit quality risks, especially in credit unions.

“Antigua and Barbuda is highly susceptible to climate change and natural disasters, and continues to face structural challenges related to high reconstruction costs following Hurricane Irma and limited access to affordable home insurance against disasters. The National Adaptation Plan to build climate resilience is expected to be completed by the end of the year. Initiatives are underway to make homes and public infrastructure more resilient to disasters, as well as to invest in renewable energies The Blue Economy Plan identifies new sustainable sectors and opportunities for economic diversification, capacity building and financing will be necessary to achieve the objectives of the plan.

“The mission would like to thank the authorities and all our other counterparts for their close collaboration and for the frank and productive discussions.

IMF Communications Department

PRESS OFFICER: Jose Luis De Haro

Call: +1 202 623-7100E-mail: [email protected]

@IMF Spokesperson

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