ST JOHN’S, Antigua & Barbuda:
Chris Walker, head of the team which visited the island from November 10 to 17, issued a statement last week giving the mission’s assessment of the macro-economic and structural policies and the performance of the program’s quantitative targets up to the end of September.
“All end-September quantitative performance targets appear to have been met. Revenue growth has continued to be lower than expected at the time of the SBA approval, but programmed tax measures have begun to show some positive results in the form of increased collection rates,” he said.
“The authorities have continued to restrain expenditure growth in order to meet the program target for the overall fiscal balance. At the same time, the authorities have achieved notable success in restructuring debts to both domestic and external creditors.”
Walker made specific reference to the agreement which the government reached in September with members of the Paris Club – an informal group of financial officials from 19 of some of the world’s biggest economies, which provides financial services such as debt restructuring, debt relief and debt cancellation to indebted countries and their creditors – to significantly extend the terms for repayment of existing debts.
However, Walker noted that public debt, although reduced from its level at the end of 2009, is still high.
Walker also noted that substantial risks still remain. These include low growth from global economic uncertainty, external financial shocks and natural disasters.
However, Walker is optimistic that the program will be successful.
“In the face of these challenges, the authorities’ continued strong commitment to the program is working to restore fiscal and debt sustainability, and to lay the groundwork for long-term stable economic growth,” he said.
According to Walker, the mission and local authorities have agreed on a draft letter of intent that describes measures being taken to enhance revenues, and outlines new structural benchmarks for 2011. These include the development and enactment of new audit legislation, the development of revised public service legislation, and the implementation of measures to enhance oversight of state-owned enterprises, among others.
“Based on these actions and on the fiscal performance, the mission notes that the positive momentum of the program has been maintained,” said Walker.
The IMF Board is expected to discuss the second review toward the end of December.
Antigua and Barbuda received the first tranche of money – US$24.5 million – after the SBA was approved, and a further US$5.1 million after successfully passing its first review.
A team from the International Monetary Fund (IMF) has reported that Antigua and Barbuda appears to have passed the second review of the program under the US$117.8 million Stand-By Arrangement (SBA) approved in June.