The Inter-American Bank (IDB) says it is providing a US$$100 million loan to help Barbados bolster its macroeconomic emergency programme.
The Washington-based financial institution said it approved the loan as the new Barbados government “seeks to regain macroeconomic stability, implement fiscal adjustment measures that foster a sustainable fiscal balance in the short and medium term and protect social spending programs for the most vulnerable Barbadians.”
The IDB said the structure and content of the IDB loan programme are aligned to the recently approved International Monetary Fund (IMF) US$290 million Extended Fund Facility (EFF) for Barbados.
“The government of Barbados is seeking financial and technical assistance from the IDB and the IMF to help formulate a comprehensive economic reform program to stabilize public finances after years of increasing debt and to address the country’s macroeconomic and fiscal crisis,” the IDB said.
“This financing, in conjunction with corrective economic and fiscal measures introduced by the government, aims to give short-term relief and allow the government to advance on important and difficult reforms to place the public finances on sustainable footing,” it added.
The IDB said this support is part of a broader effort to stabilize the Barbadian economy in coordination with the IMF and the Barbados-based Caribbean Development Bank (CDB) during the four-year programme.
The IDB said the key elements of the programme are fiscal reforms to address structural weaknesses in the nation’s fiscal framework; restructuring and privatization of state-owned enterprises; protecting vulnerable groups by strengthening the nation’s safety nets; reform of the Central Bank of Barbados to grant it with more autonomy and limit financing to the government; debt restructuring; and the liberalization of labour, product and service markets to promote growth.