Economist Says Adding To High Debt Could Imperil Generations

• Barbados’ debt position is back where it was prior to the painful debt structuring in 2018 but there is a glimmer of hope since the Government is in a better position to service its debt this time around. This assessment from Barbadian economist Carlos Forte indicated that while the current debt is manageable, the position in which Government now finds itself means that no further borrowing can take place, or it will put future generations in peril. 
• Forte’s remarks came on the heels of concerns raised by other economists about Barbados’ ability to honour its close to $1Bn debt to the IMF over the next five years, now that the programme has come to an end. Over the course of the four-year IMF-backed Barbados Economic Recovery and Transformation (BERT) programme, the Government borrowed some $870Mn, which must be paid back with interest by 2029. 
• Further, since 2020 Barbados has borrowed more than US$1.25Bn from multilateral lending institutions such as the IMF, World Bank, Caribbean Development Bank, and Inter-American Development Bank. That’s the equivalent of BD$2.5Bn. 
• Though the Prime Minister asserted that the debt was manageable, Forte reasoned that BD$2.5Bn dollars of borrowed money in three years is a staggering sum for a small economy like Barbados. The implication is that Barbados is in the early stages of yet another debt trap, one that is more dangerous given the huge foreign debt component.

(Source: Barbados Today)