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IMF Executive Board Completes Fourth, Fifth, and Sixth Reviews Under Stand-by Arrangement for Antigua and Barbuda and Approves US$20.3 Million Disbursement

The Executive Board of the International Monetary Fund (IMF) has completed the fourth, fifth and sixth reviews of Antigua and Barbuda’s economic performance under a program supported by a 36-month Stand-by Arrangement (SBA). The completion of the reviews allows the immediate disbursement of an amount equivalent to SDR 13.5 million (about US$20.3 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 40.5 million (about US$61 million).

In completing the review the Executive Board approved the authorities' request for waivers of nonobservance of the performance criteria on the central government overall deficit including grants, the contracting and guaranteeing of external debt by the nonfinancial public sector, and the accumulation of central government budget expenditure arrears. These waivers were granted on the grounds of temporary or minor deviations from the program objectives and the corrective measures undertaken by the authorities.

The Executive Board also approved the authorities’ request for rephasing of purchases under the SBA, consistent with Antigua and Barbuda’s lower balance of payments need. The SBA was approved on June 7, 2010, for an original amount of total access equivalent to SDR 81 million (about US$128.0 million).

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 was severely hit by the global financial crisis, leading to lower government revenue, higher public sector debt, and financial sector shocks. Despite a pick-up in tourist arrivals, growth prospects remain well below their pre-crisis level.

“The government has, nevertheless, continued to make progress in fiscal consolidation, particularly through expenditure control and revenue-enhancing reforms. Advances in debt restructuring helped reduce the public debt and debt service burden. Continued fiscal consolidation will be necessary to ensure fiscal and debt sustainability. Timely implementation of structural reforms in revenue administration and public financial management will be particularly important.

“The collapse of a major bank in 2011 presented additional challenges to the banking system, and its resolution will add to the public debt. Moving swiftly to resolve the bank in a way that adequately recognizes its capital needs and does not burden the rest of the banking system will be important to preserve the health of the financial system. In addition, financial sector reforms are needed to help maintain financial stability, including reforms in banking supervision, bank restructuring, and the regulatory and legal framework.”