The International Monetary Fund has urged Antigua and Barbuda to rein in current spending and rebuild fiscal buffers, warning that despite a strong post-pandemic recovery, the country remains exposed to economic shocks due to elevated debt levels and rising recurrent costs.
Imf Warns Antigua Barbuda
In its concluding statement following the 2026 Article IV mission, the IMF acknowledged continued economic growth driven largely by tourism and construction, but cautioned that improved growth conditions have not yet translated into sufficient fiscal resilience. The Fund stressed that this is precisely the period when small, open economies should be strengthening their financial defenses.
The IMF said public finances remain under pressure from high recurrent expenditure, including wages, transfers, and debt servicing, limiting the government’s ability to rebuild reserves needed to absorb external shocks such as natural disasters, global downturns, or disruptions in financing. While revenue performance has improved alongside the recovery, spending growth has continued to outpace gains, weakening fiscal balances.
Public debt remains elevated, the Fund warned, and debt sustainability hinges on disciplined fiscal management, stronger primary balances, and careful control of day-to-day government outlays. The IMF noted that Antigua and Barbuda’s vulnerability to climate-related events heightens the risks associated with high debt, as it reduces fiscal space when emergency spending becomes necessary.
While supporting ongoing infrastructure development, the Fund cautioned that capital spending must be aligned with long-term financing capacity and should not be accompanied by unchecked growth in recurrent expenditure. Failure to contain current spending, it said, could undermine macroeconomic stability and limit policy flexibility over the medium term.
The IMF also called for improvements in public financial management, expenditure efficiency, and revenue administration to support fiscal adjustment without derailing growth. It emphasised that rebuilding fiscal buffers during periods of expansion is critical for resilience in small island economies.
The Article IV consultation forms part of the IMF’s regular surveillance of member states and will be followed by a more detailed staff report, including debt sustainability analysis, in the coming weeks.
