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IMF: Urgent need for fiscal consolidation

SHERRYLYN CLARKE, [email protected]

IMF: Urgent need for fiscal consolidation

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THE BARBADIAN ECONOMY continues to face major challenges, including low growth, a very large fiscal deficit and a high debt burden, says the International Monetary Fund (IMF).
Members of the Washington-based staff who left Barbados today following a five-day periodic review visit, said the need for fiscal consolidation was urgent and predicted that real Gross Domestic Product would decline by 0.6 percent this year, as slightly stronger tourism activity was offset by the impact of the Government’s deficit reduction efforts.
Inflation is also expected to remain subdued and private sector credit growth weak, said the Fund, while noting that unemployment had risen from 11.7 to 13.2 percent in the fourth quarter of last year.
“The authorities agree and have implemented most of their announced budget measures. Follow up is essential to ensure that these measures produce material results in the near term to lower the government’s financing needs,” it added.
The IMF team, led by Mission Chief for Barbados Nicole Laframboise, arrived on Monday and left today.
They reviewed recent economic developments and discussed the main policy priorities, and met with Minister of Finance Chris Sinckler, Governor of the Central Bank Dr DeLisle Worrell, government officials, and representatives from labour and the private sector. (RJ)