The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
The global crisis has hit Barbados front and center. The broad economic weakness has hurt the labor market, while inflation remains stubbornly elevated. The major challenge ahead is to put public debt on a steady declining path to support both domestic and external stability. A decisive fiscal adjustment is the best way to protect the exchange rate peg while the current monetary stance is broadly appropriate. Banks remain healthy, but tighter regulations are needed. Supervision of nonbank financial institutions needs to be revamped.