Barbados: 2026 Article IV Consultation and Request for a Stand-By Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Barbados

This paper presents 2026 Article IV Consultation and Request for a Stand-By Arrangement. The authorities’ strong implementation of the homegrown Barbados Economic Recovery and Transformation Plan 2022, supported by IMF arrangements, has reinforced macroeconomic stability and facilitated structural reforms. While the economic outlook remains stable, it is subject to downside risks, amidst an external environment impacted by geopolitical tensions and global policy uncertainty. The authorities are committed to maintaining strong fiscal surpluses to keep debt on a declining path and achieve the public debt target of 60 percent of GDP by FY2035/36. The exchange rate peg remains a critical anchor for macroeconomic stability, supported by ample international reserves. The financial system is stable and the authorities are pursuing important reforms to bolster resilience, including improvements to banking supervision and further enhancements to the Anti-Money Laundering/ Combating the Financing of Terrorism framework. Reforms to boost productivity, competitiveness, and resilience will be critical to support economic transformation and deliver more sustainable and inclusive growth. Priorities include tackling infrastructure bottlenecks, improving the business environment, and investing in skills and education.