Above: downtown St John’s (CJ Photo)

By the Caribbean Journal staff

Antigua and Barbuda’s economy is expected to recover “gradually” this year, according to the International Monetary Fund, which recently completed its seventh review of the country’s economic performance under a programme supported by a 36-month Stand-By Arrangement.

The completion allows the immediate disbursement of $5.2 million, bringing total disbursement under the SBA to $67.6 million.

Antigua met all performance criteria under the programme for the end of June 2012 except for a “minor and temporary breach of the continuous performance criterion on external arrears,” the fund said.

While Antigua’s economic contraction in the last three years reflected the global financial crisis, the IMF’s Min Zhu said weaker domestic activity and an uncertain global environment “continue to pose a risk for growth prospects.”

“In the face of these challenges, the authorities have continued to make progress on the fiscal consolidation programme through control of expenditures and improvements in revenue administration,” said Zhu, deputy managing director and acting chair of the fund’s Executive Board. “The authorities have continued their successful efforts in debt restructuring to reduce the burden of debt service and lower the level of public debt, although contingent liabilities in state-owned enterprises and the banking sector are presenting challenges.”

The fund also said the process of resolution of the Antigua and Barbuda Investment Bank was at an “advanced stage,” and that authorities were making efforts to conclude the resolution “as soon as possible.”

“Continued successful implementation of the programme in the fiscal area is key to a steady reduction of the public debt burden and to fiscal sustainability,” he said. “This calls for sustained fiscal discipline and resolute implementation of structural reforms in revenue administration and public financial managemnet.”

The SBA was approved in June 2010 for an original amount of total access of about $128 million. It was later adjusted.