The government’s handling of the Antigua and Barbuda economy over the past
year has received the stamp of approval from the International Monetary Fund
(IMF), the world’s foremost authority on these matters.
Following its latest Article 4 assessment of the economy, the International
Monetary Fund (IMF) commended Antigua and Barbuda’s robust economic
performance, forecasting a solid growth rate of 5.7 percent for the year 2023. The
twin-island nation’s economy has demonstrated resilience, primarily fueled by the
strength in tourism and construction sectors.
Tourism, a cornerstone of Antigua and Barbuda’s economy, played a pivotal role
in driving growth, with both sectors experiencing notable strength. The report
indicates that real economic activity is on track to return to pre-pandemic levels
during 2023, signaling a significant milestone in the nation’s recovery from the
economic challenges posed by the global health crisis.
After a notable peak of 9.2 percent at the end of 2022, inflation exhibited a positive
trend, falling to 6.6 percent by August of the following year. Core inflation has
shown a steady decline, reflecting a favorable economic environment and effective
policy measures.
The current account deficit, which widened to an estimated 16.2 percent of GDP in
2022, is expected to contract to around 12 percent of GDP in 2023. While higher
tourism receipts partially offset by increased goods imports and a decline in the
terms of trade contributed to the deficit, the projected reduction signals positive
adjustments in the external balance.
Antigua and Barbuda experienced a rebound in nominal GDP, leading to a
decrease in public debt from 95 percent of GDP at the end of 2021 to 87 percent at
the end of 2022. Despite this improvement, the nation faces challenges with high
gross financing needs, and there has been limited progress in addressing arrears to
both creditors and domestic suppliers.
The country’s financial sector remains stable, as highlighted by the report.
However, there are concerns raised about the rapid growth in credit union lending,
albeit from a low base. Analysts have expressed apprehensions about potential
impacts on future credit quality, calling for careful monitoring and management of
this aspect of the financial sector.
In summary, the IMF’s assessment paints a positive picture of Antigua and
Barbuda’s economic trajectory, with strong growth, a decline in inflation, and
improving external balances. However, it underscores the importance of addressing
lingering challenges, particularly in managing public debt and ensuring the
sustainability of credit union lending. As the nation looks towards a post-pandemic
future, these insights provide valuable guidance for policymakers and stakeholders
alike. The full report is available for free download, allowing a more in-depth
exploration of the nuances of Antigua and Barbuda’s economic landscape.