The Executive Board of the International Monetary Fund (IMF) has completed the seventh review of Antigua and Barbuda’s economic performance under a program supported by a 36-month Stand-by Arrangement (SBA). The completion of the review allows the immediate disbursement of an amount equivalent to SDR 3.375 million (about US$5.2 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 43.875 million (about US$67.6 million).
In completing the review, the Executive Board approved the authorities’ request for a waiver of nonobservance of the performance criterion on the central government external payments arrears. The waiver was granted on the grounds of temporary and minor deviations from the program objectives and the corrective measures undertaken by the authorities. The Executive Board also approved a request for a waiver of applicability for the end-September 2012 performance criteria (PC). This waiver was necessary because the Executive Board meeting was scheduled to take place after end-September but prior to the availability of data to assess the relevant end-September PCs. In addition, data revisions indicate that the reported basis for the Executive Board granting a waiver of the end-September 2011 performance criterion on the central government overall deficit was off by a small amount, which was deemed to be irrelevant from a macroeconomic perspective, and the Executive Board approved the relevant waiver of the related condition.
The SBA was approved on June 7, 2010 (see Press Release No. 10/232), for an original amount of total access equivalent to SDR 81 million (about US$128 million), which was later adjusted pursuant to the authorities’ request and consistent with Antigua and Barbuda’s lower balance of payments need (see Press Release No. 12/202).
Following the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair, made the following statement:
“The economy of Antigua and Barbuda is expected to recover gradually in 2012 after a significant contraction in the last three years, reflecting the global financial crisis. Nevertheless, weaker domestic activity and an uncertain global environment continue to pose a risk for growth prospects, which remain well below their pre-crisis levels.
“In the face of these challenges, the authorities’ have continued to make progress on the fiscal consolidation program through control of expenditures and improvements in revenue administration. All of the performance criteria under the program for end-June 2012 were met, except for a minor and temporary breach of the continuous performance criterion on external arrears. The authorities have continued their successful efforts in debt restructuring to reduce the burden of debt service and lower the level of public debt, although contingent liabilities in state-owned enterprises and the banking sector are presenting challenges.
“The process for resolution of Antigua and Barbuda Investment Bank is at an advanced stage and the authorities are making efforts to conclude the resolution as soon as possible. Measures on banking supervision, bank restructuring and updating the regulatory and legal framework are being planned to maintain the stability of the financial system going forward.
“Continued successful implementation of the program in the fiscal area is key to a steady reduction of the public debt burden and to fiscal sustainability. This calls for sustained fiscal discipline and resolute implementation of structural reforms in revenue administration and public financial management. Fiscal reforms will also enhance the quality of adjustment and provide the space needed to accelerate job- and growth-enhancing expenditures, particularly public infrastructure investment.”