The Gambia is consolidating its democratic change by successfully organizing peaceful and transparent elections. President Barrow was reelected for a second five-year term in December 2021; his party and its alliance hold half of the parliamentary seats following an election in April 2022. A fourth wave of the COVID-19 pandemic hit the country in late 2021-early 2022. New infection cases have dropped to almost nil recently. The vaccination rate currently stands at about 20 percent of the adult population. The Gambia is already facing significant repercussions of the war in Ukraine.
International Monetary Fund. Middle East and Central Asia Dept.
Swift and decisive policy response to the Covid-19 pandemic has helped to mitigate the health and economic impact of the crisis. Fast vaccination rollout has also strengthened the economy’s resilience to new pandemic waves, paving the way for a speedy recovery. As the economy rebounds, a gradual exit from pandemic support measures is underway.
International Monetary Fund. Western Hemisphere Dept.
Despite significant economic shocks associated with the COVID-19 pandemic, twin natural disasters, and the war in Ukraine, Barbados has made good progress in implementing its Economic Recovery and Transformation (BERT) plan to restore fiscal and debt sustainability, rebuild reserves, and increase growth. International reserves increased to US$1.5 billion at end-2021 supported by IFI loans. This, and a successful 2018-19 public debt restructuring, helped rebuild confidence in the country’s macroeconomic framework. Economic growth is projected at 11 percent for 2022 premised on a robust recovery of tourism, which is expected to return to pre-pandemic levels by 2024. The outlook nonetheless remains highly uncertain, and risks are elevated, including from higher global commodity prices following the Russian invasion of Ukraine that are feeding into inflation. Since Barbados imports the bulk of its food and energy needs, the government has adopted temporary VAT caps on oil products to contain retail price increases (fiscal cost of 0.3 percent of GDP). While fiscal accommodation was needed to respond to the pandemic and natural disasters over the past two years, the authorities are committed to running primary surpluses from FY2022/23 onwards which need to reach 5-6 percent of GDP in three years, consistent with meeting the 60 percent of GDP debt target by FY2035/36.