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Home Local News

IMF gives local economy ‘thumps up!’

pointe team by pointe team
January 25, 2024
in Local News
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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.

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