New IMF Global Report Reinforces Call for Antigua’s Fiscal Reforms

• The International Monetary Fund (IMF), released its global fiscal report, highlighting the need for governments across the world to implement fiscal reforms, to reduce the economic risks to countries carrying high debt loads.
• The IMF’s October 2024 report entitled ‘Fiscal Monitor: Putting a Lid on Public Debt’ was driven from the same database used for the October 2024 World Economic Outlook and Global Financial Stability Report also referred to as “IMF staff projections.”
• The global report reinforced previous IMF recommendations for Antigua and Barbuda, warning that delays in implementing fiscal reforms could lead to increased economic risks. The report emphasised many of the same concerns about Antigua and Barbuda during its visit in June, particularly regarding debt management and revenue collection.
• “Public debt is very high, rising and risky,” said Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, announcing that global public debt is expected to exceed $100Tn this year. The IMF warns that delays in addressing fiscal challenges will make necessary adjustments more difficult in the future. This global warning comes just months after the IMF urged Antigua and Barbuda to address its fiscal challenges.
• In June, the Fund mission team noted that while the country’s debt-to-GDP ratio had improved to 76% in 2023, down from 100% during the pandemic, “cash constraints continue to bind, and domestic and external arrears are substantial.” The new report’s recommendations align closely with specific advice given to Antigua and Barbuda, including strengthening tax collection systems and broadening the tax base, better tracking of government spending and debt, and a focus on smart spending that helps the economy grow while getting debt under control.
• The good news, according to the IMF, is that now is a good time for countries to tackle these problems. With global inflation cooling down and many economies doing relatively well, countries have a better chance of fixing their finances without causing too much economic pain.
• For emerging markets and developing economies like Antigua and Barbuda, the IMF particularly emphasised the importance of upgrading tax systems and enhancing revenue administration capacity, making tax collection more efficient and fairer by protecting important government services while cutting unnecessary spending, and being more open about government finances so people know where their money is going.

(Source: Antigua Observer)