Antigua’s High Public Debt Burden an Ongoing Challenge Says IMF

The International Monetary Fund has stated that Antigua and Barbuda’s high public debt burden continues to challenge the country’s economy.

An International Monetary Fund (IMF) team, led by Mr. David Moore, visited Antigua and Barbuda from June 17 to 21, 2024, and met with government officials and other stakeholders to discuss recent economic developments, the economic outlook, and policy priorities.

The IMF concluded that the public debt-to-GDP ratio has declined from its pandemic high, from around 100 percent in 2020 to an estimated 76 percent in 2023, reflecting the economic recovery and an upward revision to nominal GDP from a rebasing of the national accounts statistics.

However, cash constraints continue to bind, and domestic and external arrears are substantial.

According to the IMF, fiscal adjustment is needed to create space to clear arrears and prevent their reemergence.

“The timely completion of the authorities’ validation of domestic arrears, development of a comprehensive arrears clearance strategy, and close engagement with creditors and domestic suppliers will be essential for restoring debt sustainability,” the report said

Meanwhile, the IMF said that given Antigua and Barbuda’s high debt and financing needs and susceptibility to external shocks, measures to improve the fiscal position are critical to help reduce vulnerabilities.

“The 2024 budget includes a package of revenue measures—in particular, increasing the standard ABST rate and broadening its base, introducing excise taxes on alcohol, tobacco, and cannabis products, and raising property taxes for high-end properties—that is expected to improve the fiscal position by around ½ percent of GDP in 2024,” the report states

According to the document, the fiscal position can be strengthened further, including through closer adherence to the cap on discretionary tax exemptions and continuing the recent efforts to enhance expenditure commitment controls.