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The International Monetary Fund has recently appraised the Antigua and Barbuda economy, and Financial Secretary Rasona Davis-Crump is pleased with the results. However, she notes that there is still work to be done.
Davis-Crump discussed the IMF’s Article 4 review, stating that it provides a comprehensive and fair assessment of the state of Antigua and Barbuda’s economy.
She believes the report highlighted the positive outcomes for several key economic indicators and reinforced the Ministry’s perspectives on the current major macroeconomic challenges.
She also noted that there is still work to be done better to align revenue performance with the level of economic expansion.
When asked about the steps being taken to address the weaknesses highlighted by the IMF, Davis Crump explained that the 2024 Budget presentation included a number of measures that are intended to build fiscal resilience.
These measures mainly focus on enhancing revenue performance, improving expenditure management, and reducing arrears
Other interventions include strengthening social programs, better targeting of subsidies, strengthening regulatory oversight of systemically important financial institutions, and supporting initiatives to increase MSMEs’ access to credit.
Davis-Crump further explained that several measures are being implemented to ensure that the positive growth rate forecast by the IMF for 2023 continues into 2024 and beyond.
The government will continue to pursue investment-enabling policies, including concessions during the construction phase of ongoing or upcoming private and public sector projects.
Additionally, with improved revenue performance, the government will be better positioned to execute critical infrastructure development projects that will be important drivers for economic expansion. Other projects and events such as the UWI Five Islands Campus expansion project, the SIDs Conference, ICC T20
The World Cup is expected to have a positive impact on GDP growth in 2024 and the short to medium term.
Davis-Crump also addressed public concerns regarding the recent two percent increase in ABST and its potential impact on inflation. She stated that through the Prices and Consumer Affairs Department, the government is closely monitoring the implementation of the increased ABST rate to ensure that retailers are not using the change as an opportunity to increase prices indiscriminately.
The Ministry of Finance will work with the Prices and Consumer Affairs Department and other relevant stakeholders to increase surveillance and reporting on price levels.
Moreover, the basket of ABST zero-rated items is under review, and recommendations will be made to adjust the list of goods where appropriate.
Any significant increase in inflation, outside of price-gouging, will be due to adverse changes in international price levels rather than domestic changes in taxes.