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The International Monetary Fund (IMF) says Barbados is emerging from the “severe . . . global economic crisis” and  predicts economic growth this year.
Therese Turner-Jones, chief of an IMF mission to Barbados last week, said in a statement yesterday that the “economy is beginning to recover as growth started to pick up in early 2011”.
Moreover, the Washington-based multilateral institution said the island’s gross domestic product (GDP) was projected to grow by two per cent this year due mainly to higher tourist arrivals, “signalling the onset of a recovery from the slow growth in 2010 and the two earlier years of negative growth”.
The IMF?statement followed positive news from international rating agency Standard &?Poor’s that it was maintaining the country’s investment grade rating of BBB while assigning a stable outlook.
Meanwhile, the IMF said: “Notwithstanding downside risks, including from the uncertain global environment and concerns about inflationary pressures due to higher world food and fuel prices, the [IMF] team expects growth to continue on a steady path, supported by a recovery of tourism and financial services activity.”
The IMF said its discussions with the Barbados Government on May 10 to 13 centred on “strategies to maintain fiscal and debt sustainability by putting the debt on a declining path over the medium term.”
The IMF official said fiscal consolidation remained the top priority, consistent with Government’s commitment to implement its medium-term fiscal framework.
“While the banking system remains liquid and well capitalized, continued vigilance is warranted, as the improvement of financial sector indicators is likely to lag the recovery.
“The launch of the Financial Services Commission, which will bring under one umbrella the supervision of insurance, credit unions, securities and international financial services, will strengthen the regulation and supervision of non-bank financial institutions,” the IMF said.
The IMF said it also “welcomed the appointment of a judicial manager for CLICO Life Insurance and expressed support for a prompt resolution that minimizes fiscal contingent liabilities while emphasizing the need for a regional mechanism for coordination of crisis resolution in future events to ensure regional financial stability”. (GE)