Against a backdrop of uneven economic progress for the Caribbean twin-island nation, the International Monetary Fund has issued a clear call for additional fiscal policy overhauls, warning that unresolved payment arrears and persistently high financing requirements still put long-term debt stability at risk. In its newly published Article IV consultation report released this week, the global financial body acknowledged the meaningful strides Antigua and Barbuda has already made to cut public debt levels and shore up its overall fiscal standing, but flagged that long-outstanding payments owed to Paris Club creditors and domestic vendors remain a pressing unresolved issue.
“Persistent arrears and elevated gross financing needs are constraining access to longer-term financing and undermining debt sustainability,” the IMF Executive Board said in an official statement following its assessment. Board directors have pushed the Antiguan and Barbudan government to build a robust, all-encompassing strategic framework that can clear existing arrears, diversify the country’s sources of financing, and free up budget space for investments that strengthen the economy’s ability to absorb future shocks.
Beyond clearing backlogged payments, the IMF has laid out a suite of additional policy recommendations to shore up public finances. These include new measures to boost government revenue collection that will help rebuild depleted fiscal buffers and keep the country on track to meet its core fiscal goals. Top priorities outlined by the fund include expanding the overall tax base, rolling back unnecessary tax exemptions, capping growth in current public spending, and refining the targeting of social support programs to ensure aid reaches the populations that need it most.
Directors also emphasized the need for institutional upgrades, urging national authorities to strengthen fiscal governance structures and enhance oversight, transparency, and standardized reporting for both general government finances and state-owned public enterprises. These changes, the IMF argues, would reduce mismanagement risks and build greater investor confidence in the country’s fiscal trajectory.
The IMF’s report did highlight tangible recent progress for Antigua and Barbuda: between 2024 and 2025, the nation’s fiscal position strengthened notably, driven by improved tax enforcement and collection, higher capital inflows from the country’s popular Citizenship-by-Investment Programme, disciplined government spending, and controlled modest increases in capital expenditure. The fund projects that the nation will post a primary budget surplus of nearly 5 percent of gross domestic product (GDP) in 2025, an improvement that has helped drive significant debt reduction. Public debt has fallen sharply from a peak of 101 percent of GDP in 2020 to an estimated 68 percent of GDP in 2025, a decline directly tied to the stronger fiscal performance of recent years.
Even with these notable gains, the IMF stressed that significant headwinds remain. Persistent global economic uncertainty and long-standing structural debt vulnerabilities continue to create major downside risks for the small open economy, which relies heavily on tourism and foreign investment. To address these risks and prevent the accumulation of new arrears in the future, the fund has called for sweeping upgrades to the country’s cash flow management and debt governance practices.