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IMF: Antigua and Barbuda makes ‘significant progress’
ST JOHN’S—The International Monetary Fund (IMF) says Antigua and Barbuda has made “significant progress” towards meeting the goals of its fiscal consolidation programme and reduce debt and that it expects the economic recovery to continue in 2013. An IMF mission headed by Geoffrey Bannister has ended a visit to the island to carry out a review of the multi-million dollar Stand By Agreement, Antigua has with the Washington based financial institution.
The team held talks with Prime Minister Baldwin Spencer and other stakeholders within the public and private sector. “The authorities have made significant progress towards meeting the goals of their fiscal consolidation programme, to restore debt sustainability and lay the foundations for sustainable growth, despite a challenging international economic environment and domestic financial sector problems,” Bannister said.
He said fiscal consolidation and debt restructuring lowered the debt-to-gross domestic product (GDP) ratio from 102 per cent in 2009 to 89 per cent last year in spite of a large economic contraction during this period. “Reforms in revenue administration and public financial management have helped strengthen public finances. All of this provides a solid anchor for economic recovery and growth, which is already bearing fruit.
“Real GDP grew by 1.6 per cent in 2012, led by a recovery in tourism and construction, the latter related to government initiatives. This welcome economic expansion is the first since 2008. We expect the economic recovery to continue in 2013,” Bannister said. He said that the focus of the mission was to assess the performance of the local and confirm fiscal targets for 2013.
“Although the fiscal outturn in September 2012 was below programme targets, performance in the final quarter of 2012 was strong and the performance criterion on the overall fiscal balance for end-December was met with a small margin. “Tax revenue was 1.4 per cent of 2012 GDP higher than in 2011, a commendable achievement that shows structural reforms in revenue administration are starting to produce results. The government also controlled expenditure effectively, keeping it well within programme targets throughout the year.
“For 2013, the fiscal programme is consistent with a central government primary surplus of three per cent of GDP and a central government overall surplus of 0.3 per cent of GDP. This includes a substantial increase in capital expenditure over 2012 levels in order to rebuild critical infrastructure and bolster the recovery,” Bannister said.
But he noted that while notable progress has been made on the structural reform agenda, there have been some delays and a number of benchmarks remain to be completed in the next three months. He said good progress continues to be made on public financial management, civil service and public enterprise reforms, with ongoing technical assistance and that progress has also been made on improving tax compliance both within and outside the government.
Bannister said passage of amendments to the Tax Administration and Procedures Act (TAPA) are also necessary, and the authorities are committed to taking the amendments to Parliament for approval before May 31 this year. He said appropriate legislation regarding the financial sector is expected by mid-May, adding that “good progress” has been made in improving compliance with standards for Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT).