ST JOHN’S, Antigua -- An International Monetary Fund (IMF) mission led by Geoffrey Bannister visited Antigua and Barbuda during August 14–24, to undertake the combined seventh review of the program under the Stand-By Arrangement (SBA) approved by the Fund’s Executive Board on June 7, 2010 and the Article IV consultation.
The mission held meetings with Prime Minister Baldwin Spencer, Minister of Finance Harold Lovell, Minister of Tourism John Maginley, senior officials of the Ministry of Finance, Ministry of National Security and Labour, and the ECCB, members of Parliament, and representatives from labour unions and from the local business community.
At the conclusion of the mission, Bannister issued the following statement on Tuesday in St John’s:
“The focus of the mission was to assess the quantitative performance at end-June 2012 under the SBA; review the ongoing macroeconomic, financial and structural policies; and conduct the Article IV consultations. The mission is reviewing information to determine the compliance with performance criteria on the overall fiscal balance. The continuous performance criterion on external arrears, was breached by a very small amount due to a delay in loan payments of less than a month. All other performance criteria on domestic and external debt and arrears were met. Revenue performance in the first half of 2012 has been as envisaged under the program. Current expenditure was higher than envisaged, but capital expenditure was restrained to meet the program target.
“Progress has been made on the financial and structural reform agenda, although there have been some delays. Several benchmarks have been achieved, including: (i) the on-site full scope examinations of indigenous banks by the ECCB and, (ii) the drafting of revised public service legislation. Although there have been some delays, the authorities are pressing ahead with other financial and structural reforms to conclude the resolution of ABI Bank. A few important structural benchmarks are expected to be completed in September, including: (i) enacting the new Tax Administration Procedures Act; (ii) reaching the target of 40 percent in tax compliance by professionals and 15 out of 23 statutory bodies; (iii) the presentation and passage of a New Customs Act; (iv) the implementation of the Harmonized System 2007 customs code; and (v) the presentation of a strategic plan for the new bank.
“The mission and the authorities are discussing a draft memorandum of economic and financial policies that maintains the fiscal targets, financial and structural benchmarks for 2012 and 2013. The mission also discussed macroeconomic policies that would generate sustainable medium-term growth, mitigate risks to fiscal consolidation and debt sustainability, and strengthen the financial sector. The mission and the authorities agreed to continue discussion on the statistical issues related to the fiscal targets under the program before a definitive evaluation can be made.
“The authorities have reiterated their strong commitment to the policies and objectives of their Fiscal Consolidation Program, and recognize the importance of strong macroeconomic, financial and structural policies in achieving the goals of their National Economic and Social Transformation plan. Continued strong implementation of the program will lay the foundation for fiscal sustainability and financial stability, which are key to achieving long-term economic growth.”