Barbados Seen Needing IMF Help Amid No Growth, High Debt

Barbados business leaders and economists say the Caribbean island should seek an accord with the International Monetary Fund as the government struggles to spur an economy with one of the world’s heaviest debt burdens, Bloomberg News reported. Efforts by the government to trim the public sector by firing 3,000 workers and reining in spending failed to spark growth in the first half of the year in a country with a debt load equal to 96 percent of gross domestic product. That prompted the Barbados Chamber of Commerce to say the government should consider talks with the IMF. “We have all the costs of an IMF program already, without the benefits of a loan or stand-by agreement to provide financing for any temporary shortfalls,” said Avinash Persaud, a Barbados-born economist and chairman of London-based investment bank Elara Capital. Barbados’s government is using more than 15 percent of tax revenue to pay interest on its debt, Standard & Poor’s said in a July report in which it predicted no growth for the $4.2 billion economy. While local banks have cash to lend, there is a reluctance on the part of investors that is stifling growth, said Persaud. Read more.